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Jimmy, the focus of the discussion on Airbnb and Apartment buildings is quite correctly on planning issues – as you say, it is wrong to force buildings currently zoned “residential only” to accept holiday lets of entire apartments.
But that does not assist many owners, particularly in high-rise buildings (4+ storeys) because their zoning is often a mixed residential and commercial zoning. For example, buildings with retail or professional shop fronts on the ground floor and residential above.
The focus for these mixed use buildings needs to be more upon whether the building was designed for, and suitable for, use as serviced apartments. Serviced apartments are a more ‘aggressive’ or ‘intensive’ use than owner-occupied residential or long term residential tenancies (more than 90 days).
Interestingly enough, some of the problems that arise from using a building designed for owner-occupancy or long term rental for serviced apartments were highlighted in recent NSW Supreme Court decision involving Meriton Suites.
As you know Meriton builds apartments. In recent years it has reserved some high rise towers for use as serviced apartments, which it calls Meriton Suites.
Because they are not designed or constructed to be as robust as a hotel, they suffer major service disruptions. Some examples are: lifts out of service (due to heavy rain), lift delays, phone lines down, no hot water, computer issues affecting service for guests, evacuation of a floor due to gas leak, lost power, excessive construction noise next door.
To read my case note on the decision click this link https://www.lexology.com/library/detail.aspx?g=8119788f-07c4-463e-9a6c-020dc7bace27
In my view, this question needs to be asked (and answered) – Is a serviced apartment use in my building suitable given its design and construction?
Congratulations – What you were far too polite to say was that Domain / SMH Property coverage is nothing more than a medium for selling real estate, a fantasy world where smiling purchasers are over the moon to pay over the top prices in a market that is always growing.
The Fin has a more grounded view, with markets going down as well as up, and with more policy and less populism.What’s prompting this article is that the NSW Government is crying out for help!
In its Options Paper, it has suggested four options: (1) Self-regulation;
(2) Special rules for Strata Properties;
(3) Regulation through the Planning System; and
(4) Registration or Licensing.
It has given the general public, industry and stakeholders until 31 October 2017 to make submissions.
For my summary of the Options Paper and a link to it to make submissions click https://www.lexology.com/library/detail.aspx?g=7636e2e1-9f10-4e9f-b6ff-caf1a515c13b
This is your chance to help the NSW Government in its hour of need!True, but we apartment & strata owners are no experts and need to rely on others!
The legal liability will lie upon the fire safety inspectors to identify flammable cladding when they issue annual fire safety inspection certificates. If no annual fire safety inspection is needed or obtained, the responsibility will lie on the owners corporation.
And once the flammable cladding is identified, it must be removed or the strata building insurer might not respond to fire damage claim.Well spotted, Jimmy.
Accommodation taxes have never really taken off in Australia, for many reasons. So the possibility of an accommodation tax being introduced in New South Wales is remote.
That’s not to say that the Australian Taxation Office is sitting idle – the same as it has the power to order banks to provide details of interest paid to its customers, it has the power to order AirBnb, Stayz, and other internet hosting services to provide details of its Australian hosts, and how much they are being paid. This income is of course taxable.
And it’s not to say that owners corporations should sit idle – the extra wear and tear on the common property, higher insurance levies and extra garbage charges need to be paid for and the best way to do so is for owners corporations to impose a short-stay service levy on owners of short-stay apartments. But there are legal hurdles. Except for the recovery of extra insurance levies arising from a particular use of the strata lot. which is permitted under section 82 of the Strata Schemes Management Act 2015, a legislative amendment would be needed to authorize an extra levies for owners of short-stay apartments for wear and tear and garbage charges.
Well said!
What is not mentioned in the DIY TV Shows such as The Block is that the contestants are renovating a whole block of apartments – which are then strataed for sale. Therefore they don’t need to comply with all those pesky rules and requirements for approval for renovation that strata owners need to comply with.
What are those rules and requirements? Up until now, in NSW, all work affecting the fabric of the building, from major work such as a new bathroom to minor work such as putting up a shelf in a bedroom, have all required the same approval, namely a special resolution (a 75% majority) at a general meeting of the owners corporation.
But from 30 November, this will change in a number of ways depending on whether the work is cosmetic work, a minor renovation or a major work. Specifically –
– Cosmetic work such as putting up a shelf, hanging pictures, painting and patching, laying carpet, installing built-in wardrobes and replacing blinds and curtains (like for like) will not require any approval. This is a DIY renovators paradise!
– Minor renovations such as renovating a kitchen, installing a wooden floor, electrical work, installing an air conditioner will require approval, by a simple majority (a 50% majority) resolution at a general meeting of the owners corporation. This work is not DIY territory because the owners corporation can be expected to require that the work be carried out by licensed tradesmen, at specified times, according to approved plans.
– Major renovations are all renovations other that what is listed as cosmetic work and minor renovations. All work requiring waterproofing and structural work, such as new bathrooms, laundries, plumbing work, replacement of external doors and windows, pergolas and awnings is major work which will require approval by a special resolution (a 75% majority) at a general meeting of the owners corporation. This work is for licensed tradesmen with structural engineer’s certificates and waterproofing certificates.
For more detailed information, click on my article – How the new Strata Laws make renovating easier for strata owners
I agree 100%. When they come to the ‘Review By-laws’ Agenda Item at the next AGM, the owners will either move on to the next agenda item with the comment ‘if it ain’t broke, don’t fix it’ or will set up a committee to review the by-laws which will not reach a consensus unless it is to adopt the new Model By-laws (Schedule 3 Strata Schemes Management Regulation 2016).
The upshot? The By-laws for every strata scheme which has not adopted a new set of By-laws will remain unchanged from the version introduced on 1 July 1961 when Strata Titles were introduced into NSW.
It’s not too late for the Strata Schemes Management Regulation to be amended so that the Agenda Item becomes –
The new Model By-laws (as per Schedule 3 of the Regulation) become the By-laws of the Strata Scheme in the place of the old Model By-laws (as per Schedule 2 of the 2015 Act), unless the owners pass a special resolution to retain the old Model By-laws.
This amendment would not upset 99% of the Changes of By-laws that I have seen and would serve to bring a much needed update to the 1961 era By-laws which are re-birthed as Schedule 1 By-laws in the 2015 Act.Addendum to my post – The article is
The law is catching up with short stay Airbnb style accommodation in Australia
link –
https://www.lexology.com/library/detail.aspx?g=23d8ada1-db1b-4470-8ff5-d9641da604ce
I have also published a case note about the recent Victorian decision handed down on 22 July about an invalid strata by-law regarding sahort-term lettings –
Cour finds that strata owners in Victoria cannot make rules to prevent the use of an apartment for short-term lettings
link –
https://www.lexology.com/library/detail.aspx?g=afc7e814-5184-4323-b378-ab45a1c37c87
How best to deal with short-term lettings, Airbnb style, is something that the new Strata Laws in NSW – which start on 30 November 2016 – don’t cover.
Instead, the NSW Government is waiting on a Parliamentary Committee set up to inquire upon the – Adequacy of the Regulation of Short-term Holiday Letting in New South Wales – to report at the end of August 2016, before it decides.
Modifying the section 49(1) prohibition upon by-laws infringing an owner’s rights to lease is one of the matters raised in the Inquiry for consideration.
Planning matters – how should planning instruments deal with short-term lettings, how should Local Councils regulate them, is another. Should there be a database created of short-term lettings premises?
Should there be a Code of Conduct administered by the Department of Planning and Environment?
I have recently published an article which summarises
What the court found in Victoria was that strata owners cannot make by-laws (they call them rules in Victoria) to prevent the use of an apartment for short-term lettings. ‘Short-term lettings’ in that case were made by a serviced apartment operator, but would apply to AirBnB, Stayz, and in fact anyone who rents an apartment out for less than 30 days in Victoria.
The actual decision turned upon the fact that in Victoria, the power of an owners corporation to make rules is limited to common property issues – no rules can be made as to use of a strata lot.
The strata law in NSW allows by-laws to be made to govern use, but with an overriding prohibition against restricting rentals.
The NSW Committee of Inquiry into the Adequacy of the Regulation of Short-term Holiday Letting in New South Wales is currently considering what, if any, powers an owners corporation should have to restrict the use of a strata lot when it comes to short-term lettings such as serviced apartment, AirBnB, Stayz, style operations.For my commentary upon the Victorian decision click on https://www.lexology.com/library/detail.aspx?g=afc7e814-5184-4323-b378-ab45a1c37c87 (Court finds that strata owners in Victoria cannot make rules to prevent the use of an apartment for short-term lettings)
For my commentary upon the NSW Committee of Inquiry proceedings and the law on short stay lettings click on https://www.lexology.com/library/detail.aspx?g=23d8ada1-db1b-4470-8ff5-d9641da604ce (The law is catching up with short stay – Airbnb style lettings in Australia)