› Flat Chat Strata Forum › Airbnb and holiday lets › Can Strata By-laws be changed to block AirBnB in NSW? › Current Page
In my Flat Chat column in Domain, I jokingly said if you asked six lawyers you’d get seven opinions. Well, our good friend, strata lawyer David Bannerman has passed on these thoughts from Special Counsel Mark Pollinger:
I have attached links to Victorian VCAT and Supreme Court decisions relating to AirBNB. AirBNB is not a party to the proceedings and the proceedings involve an owners corporation attempting to stop various lot owners subletting through AirBNB. Their significance is that they cast doubt on the validity of a by-law restricting leasing through AirBNB.
The Supreme Court decision:
- decides the case against the owners corporation on the basis that it lacked power to make a by-law restricting letting.
- considers the New South Wales legislation and expressly suggests (p82) that section 49 may invalidate a by-law purporting to restrict short-term lettings.
https://www.austlii.edu.au/au/cases/vic/VCAT/2015/956.html
https://www.austlii.edu.au/au/cases/vic/VSC/2016/384.html
In my view, this has little application to New South Wales and is not persuasive authority for a proposition that a by-law restricting short-term lettings would be invalid. In particular:
- As to owners corporation powers to make by-laws, there are significant differences between New South Wales and Victoria.
In New South Wales, owners corporations have broad powers to make by-laws, but subject to some restrictions, including section 49. In fact, the New South Wales case law suggests that owners corporations may make by-laws in relation to almost anything, unless specifically restricted.
https://www.austlii.edu.au/au/cases/nsw/NSWSC/2006/537.html especially paragraph 37.
In Victoria, owners corporations may take only make by-laws in relation to specified matters and the case was decided on the basis, i.e. the owners corporation had no power to make the relevant by-law and it was unnecessary to consider any restrictions, such as a section 49 type restriction. In any event, Victoria does not have an equivalent of section 49, so the comments in relation to our section 49 were at most obiter dictum.
https://www.austlii.edu.au/au/legis/vic/consol_act/sa1988153/s27e.html
https://www.austlii.edu.au/au/legis/vic/consol_act/oca2006260/s138.html
https://www.austlii.edu.au/au/legis/vic/consol_act/oca2006260/sch1.html
2. The New South Wales was case law also suggested section 49(3) should not be read literally and does permit some scope to regulate leasing. However, it does suggest that transactions be prohibited on the basis of some reasonable criteria, as opposed to being prohibited outright. For example, an outright ban on short-term letting might be invalid, while a by-law prohibiting a transaction lacking requisite development consent or requiring compliance with behaviour/amenity standards might not. We need further case law to be sure, but it remains my view that there would be good prospects of defending a by-law of the latter type.
https://www.austlii.edu.au/au/legis/nsw/consol_act/ssma1996242/s49.html
https://www.austlii.edu.au/au/cases/nsw/NSWSC/2006/537.html especially paragraph 54.
https://www.austlii.edu.au/au/cases/nsw/NSWCTTT/2012/425.html especially paragraph 2.