OK, there are a lot of different issues here that you need to be sure of before you start threatening legal action.
1. If there is a by-law in place that simply reflects the residential-only status of your apartment block by not allowing short-term holiday letting, then it is valid (regardless of what Fair Trading or any other Airbnb-friendly entities may say).
The Privy Council – the highest court in the British Commonwealth – has ruled that by-laws that enforce planning regulations are not in breach of laws that protect the right of owners to deal with their properties as they wish.
The logic is that if planning laws say your block is residential-only then you don’t have that right in the first place. The NSW Government appears to have accepted this principle in its proposal of the new laws.
2. If the by-law goes beyond that and tries to control or limit (rather than ban) holiday letting, then it is probably not valid, because it would be interfering under the terms of section 139(2) of the NSW Strata Act which says “no by-law is capable of operating to prohibit or restrict the devolution of a lot or a
transfer, lease, mortgage or other dealing relating to a lot.”
The logic here is that your strata committee can’t put limits on something that is either banned or, indeed, not banned by planning regulations.
3. The Owners Corp is on very shaky ground if it starts cancelling swipe keys for any other reason than a serious potential security breach in the building.
4. The proposed changes to the laws have not been passed and we haven’t seen the fine details yet, so I would pay very little attention to them. It’s business as usual until they become law, which won’t be any day soon.
5. Other potential issues that may come into play include:
- Over-crowding (no more than two adults per bedroom), for which the fines are 10 times higher
- Your possible obligation under Section 258(2) to inform the Owners Corp of the identities of any sub-tenants in your apartment
- The behaviour of your “guests” in your home and on common property
6. Threats of claims for compensation for loss of potential income aren’t going to impress anyone. Right or wrong doesn’t come into it – basic arithmetic does. You are unlikely to get more awarded by a court than would cover your losses and your legal costs.
So where does all that leave you?
If you are a bona fide “sharer” (rather than the BS Airbnb definition which includes wholesale commercial lets of entire homes) I think your OC is treading on dangerous ground by cutting off your swipe keys and I would certainly warn them that you could take them to NCAT with a view to getting orders against them (at the very least).
The proper way for them to deal with breaches is to issue a Notice To Comply against you and then seek fines at NCAT which they may well not get.
Having said that, a smart strata committee or strata manager can find half a dozen ways of making your “sharing” plans unworkable before you can identify one single issue that would guarantee you success in a court action (which is going to cost you money anyway).
So perhaps your best plan is to dial down the threats and sit down with your strata manager and/or your committee and ask them what the problem really is and how you can resolve it.
And on that note, I’d refer you to the article on the front page of this website, about knowing when to stop fighting.