Airbnb by-laws: Strata lawyers state their cases

Amanda Farmer of  Your Strata Property:

It has always been the law that a by-law is not “capable of operating to prohibit or restrict the…lease…” of a lot. It is currently section 139 in the 2015 Act; it was section 49 in the old Act. It is nothing new.

Fair Trading now makes reference to it in their Strata Living Handbook. So what? A handbook is not a legislative instrument or jurisprudence. It does not make or change the law.

For Fair Trading to say that by-laws which restrict holiday lets are “invalid” is to apply their interpretation of section 139. It is not Fair Trading’s function to interpret the law. It is the function of courts and tribunals. Fair Trading can tell owners what the law says. As any lawyer will tell you, determining what it means is a different exercise altogether…

Fair Trading’s statement (as quoted in your column on the weekend) is unhelpful and has unnecessarily sent many buildings that have these by-laws in place in to a panic.

Neither the courts nor the Tribunal in NSW have yet determined the question of whether by-laws prohibiting short term letting are valid.

Interestingly, in June this year the Court of Appeal in Western Australia did determine the question, upholding a by-law prohibiting short term lets in a local government area where short term letting was permitted, subject to Council approval. Here’s the case. The lot owner in question had the approval of the Council to short term let, but the building enforced its by-law and prohibited the practice. The building won.

Western Australia has a very similar section to our section 139 – (ie, along the lines “no by-law is capable of restricting the lease of a lot…”) The WA Court of Appeal held that the by-law which prohibited short term lets was not restricting the lease of the lot, it was just restricting the term of the lease. Interesting interpretation, huh?

NSW Courts have interpreted this part of our strata law along similar lines in the past (just not in relation to the short term letting debate). It will only be a matter of time before the NSW law is explored with respect to short term letting and we will hopefully have some solid guidance.

Until then, it is not correct for Fair Trading to be “confirming” that strata by-laws which restrict short term letting are “invalid”. We don’t yet know if that’s what the law means and eager lawyers will be debating it both ways when the time comes.

It is also not correct, in my view, for Fair Trading to say that “bylaws telling owners they must abide by local council zoning restrictions are invalid because only local councils can enforce their zoning” (quote from your article). Isn’t that like saying: only the police can charge someone with assault, so a by-law that says “don’t punch your neighbour in the head” is invalid. No one would think twice about that kind of by-law (save that it may be stating the obvious…).

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