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Flatchatter g-g – You hit the nail on the head.
It is a noise issue primarily, and compliance with a flooring by-law secondarily.
This is the noise by-law in the Model By-Laws for Residential Strata Schemes:
NoiseAn owner or occupier of a lot, or any invitee of an owner or occupier of a lot, must not create any noise on a lot or the common property likely to interfere with the peaceful enjoyment of the owner or occupier of another lot or of any person lawfully using common property.
In terms of NCAT, provided the acoustic engineer’s evidence is good enough, NCAT will make orders for abatement of the noise – usually carpeting.
Could not agree more, Jimmy.
Apartment blocks are not respite places to be used for self-isolation. The risks are just too high for such a highly infection disease as COVID-19.
And who takes responsibility if there is an infection? Will it be Airbnb or the apartment owner? No, it will be the public health system – the Government needs to announce a close down of short-term letting as a COVID-19 measure.
In my view , it is that Airbnb and its close relation, Uber, will be casualties of the COVID-19 recession. There is no demand for Airbnb style short term accommodation, now that Australia has closed its borders. International air travel will cease on 30 March and domestic air travel has been reduced to less than half. The examples you cite in your article are desperate attempts to fill empty rooms.
The word on the street is that short-term letting agents have switched their properties to long term leases. This is supported by the fact that if you look at the ‘for rent’ properties in short-term letting hot spots, you will see a sharp rise in properties for rent in a time of year when properties available for rent are dropping.
Watch this space.Registration and fire safety compliance go hand-in-hand. There is an existing regime for short-term accommodation.
Places such as motels, hotels, backpackers hostels and boarding houses are all required to be registered with the local Council and provide annual fire safety certificates. Councils actively prosecute for non-compliance, especially the fire safety certificates which attract heavy fines for failure to lodge on time.
There is no reason why this existing regulatory regime is not extended to short-term holiday lettings.Great analysis – you have spotted a winning blindside play by the Fireys which will change the financial viability of short-term rentals (for those not into rugby union or rugby league, a blindside play is where the ball is passed unexpectedly to the short side of the field (the side with fewer players) instead of to the other side with more players where it was expected, often resulting in try to the attacking team because of the element of surprise).
The Fireys do not enforce fire regulations, it is Local Councils which do. For example, the Sydney City Council which has for some years insisted on fire exit signs, a fire extinguisher and a fire blanket, annual certification and an evacuation plan in serviced apartments. Now, the Fireys have added hard-wired smoke detectors to this list and the NSW Government have extended the fire requirements to short-term rental accommodation. This will be expensive for providers of short-term rentals because it is they, not the owners corporation, who will bear the cost of this fire compliance within their apartment / townhouse.
Which brings me to the register. The appropriate body to maintain the short-term rental providers register is surely the local council – after all, they are the planning authority who can check if the use is permissible, and they are the responsible authority for fire compliance. Of course, they need to be paid for this, and so an annual fee of $250 (as in other cities) would be appropriate.
Leave the Code of Conduct to Fair Trading, whose idea it was and who have more expertise than the Local Council in conduct matters.
I’ll be making a submission along these lines to the NSW Government and encourage other Flat Chat readers to do so!In an article in today’s online News, there is quote that Airbnb endorses the Mayor of London’s proposal for registration of Airbnb premises.
In a statement to The Mirror, an Airbnb spokesman said the property had been removed from their platform.
“Airbnb is the only platform that works with London to limit how often hosts can share their space, and we support proposals from the mayor of London for a registration system to help local authorities regulate short-term lets and ensure rules are applied equally to hosts on all platforms in the capital.”
This is the link to the article
Is it too much to expect a short-term letting registration system in NSW, especially when the Act makes provision for it if the NSW Government is so inclined? See section 54B(2)(c) Fair Trading Amendment (Short-term Rental Accommodation) Act 2018
5454 B Declaration of code of conduct applying to short-term rental accommodation industry participants
(1) The regulations may declare that a code of conduct specified or referred to in the regulations is a code of conduct applying to short-term rental accommodation industry participants.
(2) Without limiting the matters for or in respect of which a code of conduct may make provision, a code of conduct may:
(a) set out the rights and obligations of short-term rental accommodation industry participants, and
(b) provide for the administration of the code by a specified person or body, and
(c) provide for the registration of residential premises used for the purposes of short-term rental accommodation arrangements and for the registration system to include details about when residential premises are used for those purposes, …
Jimmy, there’s an old saying “If it seems to good to be true, then it probably isn’t true.”
In the Australian Taxation Office’s Guide to Rental Property Owners 2018, it states:
You can claim a deduction for certain expenses you incur for the period your property is rented or is available for rent.
The Tax Office is strict – if they see no rental income yet claims for deductions and depreciation, they will demand evidence such as ‘for rent’ posts on domain.com.au or realestate.com.au, letters from the managing agent to explain (a) the property has been available for rent and (b) the reasons why it has not been rented.
It follows that anyone trying on your scenario will fail in their claims for tax deductions, making the scenario a financial disaster.Love the discussion on Cosmetic/Minor/Major renovations – This topic is crying out for detailed clarification, which NSW Fair Trading has so far avoided.
But from a conveyancing perspective, because it is a possible defect in title, Lynnecg (and anyone else in her position purchasing a strata unit that has been renovated in this way) should impose an obligation on the vendor to obtain retrospective ‘as built’ approval to the renovation.
What I suggest is to include a special condition in the Contract such as: “Prior to completion, the vendor will, at the vendor’s expense, obtain the necessary approval from the owners corporation and the Local Council (if appropriate) to these works: …..
Completion is conditional upon this condition being satisfied to the purchaser’s reasonable satisfaction, and if required under the Strata Law, the registration of a strata by-law in respect of the works.”
This legal victory shows that the Sunset Clause Laws introduced in NSW in November 2015 have real teeth and provide real protection for off the plan buyers.
What is particularly interesting from my point of view is the fact that the property developer did a good job at explaining the delays were due to circumstances out of their control, particularly the builder going into administration, resulting in the appointment of a new builder to complete the building. They demonstrated that they were not the type of developer targeted by the Minister when introducing the new laws, i.e. a developer who manipulated events or manufactured delays so as to obtain a commercial advantage to rescind and re-sell at a profit.
However in this case, the deciding factor was the adverse effect on the purchasers if the Contracts were to be rescinded. Not only would they lose the capital gain on the apartment, but they would not be able to purchase equivalent elsewhere. The judge also took into account the social benefits the purchasers gained by what he called “lifestyle” choices: in a society where property ownership is highly valued and affords status to those who attain it.
If you would like to find out more details, click on this link to my case note on the decision Sunset Clause Law bites property developer
Jimmy, don’t hang your hat upon the the fact that the Development Approval that issued when the building stated that the approval was for the building of residential home units. Town Planning zones change over time, usually from low density to medium density to high density. It is the current zoning that is relevant.
Having said that, a residential zoning will be no protection against the new short-term rental accommodation policy because the government is proposing a ‘Short-term Rental Accommodation Planning Framework’ under which it will implement a state-wide planning framework which will introduce in all residential zones the ability to use a property for short-term rental accommodation without Council consent (called an exempt development) provided the property meets minimum fire safety and evacuation requirements.
For more click https://www.planning.nsw.gov.au/policy-and-legislation/under-review-and-new-policy-and-legislation/short-term-holiday-letting
What a rat’s nest of issues!
First for strata owners who have bought in, with strata inspection reports, not suspecting a problem. They are on their own financially, needing to to fund the re-cladding by special levy or owners corporation loan or both.
Second for strata owners selling – now the problem is in the public domain, it devalues their property in the eyes (and wallets) of prospective purchasers.
Third for buyers – does the seller have a duty to disclose the problem and potential outlay, or is it caveat emptor – buyer beware, and no complaint can be made once the ink is dry on the Contract for Sale?
Watch this space for attempts by buyers to walk away from Contracts for Sale on the basis of non-disclosure of the cladding by a strata owner seller.If I could give you a recent example where a matter of principle’ led to large legal bills for both the Owners Corporation and the Strata Owner with no change at all to the status quo it is a legal dispute about a car space in a former travel lodge building converted into strata apartments at 45 Macleay Street, Potts Point.
Click here for my case note: An Owners Corporation cannot restrict access to a car space in a strata scheme.
Recently, my sewer line was backing up because the roots of the Rhus tree on on the footpath outside my house had penetrated the sewer pipe. Council wanted the tree to remain.
So the solution we adopted was to have a specialist drainer cut away the roots and install a plastic pipe within the old clay pipes. It was not cheap – $11,000, but it solved the problem. It was cheaper than removing the old pipes and installing new ones. The sewer no longer backs up and the tree continues to flourish.
My suggestion is to obtain a quotation, and ask the OC next door to go halves.
The controversy surrounding short-term letting in strata apartments is all about permitted use.
Local Councils are responsible to lay down permitted use and administer it through property zoning. So long as the zoning permits residential use, and the strata owner rents their apartment for residential purposes, then the owners corporation is cutting across the Local Council’s functions if passes a by-law banning short-term lettings.
Local Council planning / zoning plans are nuanced. For example, using a property as a residence in a residential zone does not require a Council permit or consent. But if the residential use is a business use, such as for tourism and visitor accommodation, a permit or consent is required, which is granted subject to suitable conditions.
What is a ‘business use’ is a matter of degree. It is not necessarily a black and white ’90 day’ rule, although using it as a guide is useful.
This ‘leave short-term letting to the local Council’ approach is supported by section 136(2) of the Strata Schemes Management Act 2015 (NSW) which states –
A by-law has no force or effect to the extent that it is inconsistent with this or any other Act or law.
And there lies the answer to your hypothetical – the by-law has no force or effect because it is inconsistent with the planning law, administered by the Council.
We will soon have a decision on this by the Tribunal – NCAT – it is the central argument in an application to declare invalid a strata by-law banning short-term lettings of less than 90 days.Merry Christmas Jimmy.
The Privy Council decision (the O’Connor decision) from the Turks and Caicos Islands (the well known tax haven) is a real game changer.
I have carefully studied the O’Connor decision and am confident that it gives the green light to residential strata schemes to pass a valid by-law to ban Airbnb style holiday lettings of less than 30 days.
I have written a detailed article – Can a strata by-law restrict Airbnb style holiday lettings? A new legal decision is a game changer – which readers can google. But here is a summary:
In the O’Connor decision, the Privy Council said that the strata law restricting leases must not be read in absolute terms. Reasonable restrictions can apply. In this case, it was reasonable to ban short-stays of less than one (1) month because they are a holiday use, not a residential use, and are therefore incompatible with a residential strata scheme.
Although the O’Connor decision is not binding upon the Courts and Tribunals in Australia as a precedent, it will be able to be referenced to validate strata by-laws which ban short-term rentals of less than one (1) month in strata schemes in residential zones for these reasons:
The Privy Council decision in O’Connor was made by a Board of 5 Law Lords, who are the most senior judges in the UK. They decided on the equivalent of the Australian Strata Law and applied the common law. Their judgment must be given considerable weight.
The WA Court of Appeal decision in Byrne must also be given considerable weight. It upheld a strata by-law restricting short-stay rentals to no more than 3 months in any 12 month period.
The NCAT Tribunal decision in Estens v Owners Corporation SP 11825 [2017] NSWCATCD 63 must be given very little weight, being a decision made by an Administrative Tribunal, not by a Court. The Tribunal struck down a strata by-law which banned the lot being used by its occupants on a short-term basis for less than thirty (30) days in a residential strata scheme.
The O’Connor decision means that the Estens decision is now bad law.
It also means that this advisory in the NSW Fair Trading Booklet Strata Living is wrong:
“Strata laws prevent an owners corporation restricting an owner from letting their lot, including short-term letting. The only way short- term letting can be restricted is by council planning regulations.” (at p. 28)It is my firm view that in the future, Australian Courts and Tribunals will almost certainly apply the O’Connor decision to uphold strata by-laws which ban short-stay rentals of less than one (1) month in residential strata schemes.
Conclusion
The O’Connor decision is a game changer: With a properly drafted strata by-law, an owners corporation / body corporate can restrict Airbnb style holiday lettings of whole apartments in residential strata buildings by imposing a one (1) month minimum stay requirement.For the record, the text of the strata by-law in the O’Connor decision was:
“Each Proprietor shall: …
• Not use or permit his Residential Strata Lot to be used other than as a private residence of the Proprietor or for accommodation of the Proprietor’s guests and visitors. Notwithstanding the foregoing, the Proprietor may rent out his Residential Strata Lot from time to time provided that in no event shall any individual rental be for a period of less than one (1) month …• Not use or permit to be used the Strata Lot or any part thereof for any illegal or immoral purpose, nor for the carrying on of any trade or business other than periodic renting or leasing of the Strata Lot in accordance with these by-laws unless such trade or business activity has been approved in advance by the Executive Committee in writing, which approval may be revoked for cause.”
It’s been a very distressing journey for the parents, relatives and friends of the girl that died and the girl who survived but became a paraplegic. First the fire, then the coroner’s inquest, and now the civil law proceedings for compensation.
The scatter gun approach of suing every person remotely involved is normal in litigation such as this because until the evidence is in and the defences have been filed, it is often not possible to know who is responsible, and if so, how much responsibility they bear.
The civil law proceedings will succeed against anyone who knew of the illegal partitioning, such as the owner and the managing agent, and anyone who failed to comply with fire safety standards for the building.
It is likely that the proceedings will go to a court hearing because so many defendants (read – insurers) are involved, because they will not be able to agree between themselves how much responsibility each should bear.