Adrian Mueller of JS Mueller & Co
The by-law would be invalid as it would clearly restrict the right of an owner to lease their lot for less than 90 days. Therefore, I would advise the owners corporation to repeal the by-law and make a new by-law that would be valid and enforceable.
The new by-law would prohibit an owner or occupier of a lot using the lot, or allowing the lot to be used, for unlawful short term accommodation. This by-law would be valid because it would prohibit a particular type of use of a lot, namely unlawful short term accommodation, rather that prohibiting leases of less than 90 days.
The distinction between a by-law that prohibits a type of use, and a by-law that prohibits a type of lease, is a neat but important one.
A by-law prohibiting a type of use (such as unlawful short term accommodation) is valid (despite what Fair Trading or NCAT might say) but a by-law prohibiting a type of lease (e.g. a lease for 90 days or less) is not.
The highest court in NSW has held that a by-law is able to prohibit lots being used for particular purposes. That is why the slightly re-worded by-law would work and could be enforced through NCAT or the Supreme Court to put an end to an owner using their lot for unlawful short term accommodation..