Re: Holiday letting report – what really happened

The Fair Trading Strata Living web booklet also says this about short-term holiday letting:

The owner or occupier of a lot must ensure that it is not used for any purpose that is prohibited by council planning regulations and other laws. They must also ensure that the lot is not occupied by more people than are allowed, and that the use of the lot does not create a nuisance or hazard to others in the strata scheme.

So owners corporations can pass by-laws that say they will comply with council zoning.  And if your building is zoned residential only, then you can use that to block short-term rentals.

The Fair Trading advice will change to reflect changes in the law but I don’t know if we will see those changes embodied in the Strata Schemes Management Act.  I still think THIS SUMMARY covers most of the main options that are or were actively considered.

The government response to the Coure Report is full of qualifications but nowhere does it address one of the critical issues in the original report  – that strata law does not allow by-laws that interfere with “dealing”.

Now, clearly we have shifted from the core of that concept when we allow 75 percent of all owners to force the other 25 percent to sell their units. In other words, the Government can bring in a law that allows Owners Corporations to decided on holiday lets without interfering with the fundamentals of the Strata Act.

But if you look at the Coure response, there are so many acknowledgements of the recommendations couched in terms of “this will be considered” that it’s hard to see how much of it will be accepted.

I am absolutely convinced of two things: the government will allow genuine “home sharing” – the kind that Airbnb claims is their core business; the government will create a mechanism whereby apartment blocks can restrict holiday letting of whole homes if they so wish.

The easiest way to do that is to allow the proposed “complying development” provision with exceptions and exemptions for apartment blocks. Then apartment blocks that want to do so will be able to continue to pass by-laws supporting their zoning.

Governments hate having to go back and change laws every time a loophole appears.  That’s why Strata law has three Acts – Development, Management and Regulations.  It’s the third of those that’s most flexible and that’s where we’ll see any changes that aren’t covered by other laws.

The Coure response specifically mentions that the SSMA will be reviewed after five years (not the three the Coure report calls for) so don’t expect any major changes in that area.  In the face of a changing landscape, I suspect the government is looking for flexible changes to laws that can be tweaked if and when any negative effects become evident.

They neither want to shut down Airbnb and its ilk, nor do they want online holiday lets to swamp residential housing.  So expect low impact regulations with enough flexibility built into it to keep it all under control.

But I would recommend any apartment block that doesn’t have a short-term letting (zoning) by-law in place already to get one soon.  It may be a lot harder to do after the laws are changed.