Airbnb by-law bounced over fob-cancelling clause

I think this is a very good example of how NCAT, which is supposed to help us navigate the murky waters of strata gets far too wrapped up in its sense of self-importance.

There were two clauses that it found wanting.  One relating to the cancellation of key fobs, the other relating to how costs of pursuing breaches were to be charged.

In both instances the ruling accepts that the principles were OK. Strata schemes can restrict access to common property by people who are not entitled to be there.

It also accepts that the OC can legitimately demand refund of expenses incurred in pursuing by-law breaches.

However, in the first instance, the Appeals Board agreed with the original tribunal’s finding that the clause giving the OC “the power to deactivate access devices to the lot of any owner or occupier who is found to be in breach of this by-law” was “harsh unconscionable and oppressive” because it lacked limits or preconditions.

The ruling quotes the Court of Appeals judgement on the famous Jo Cooper pets case:

37. Access is an inherent property right. A provision such as this removes that property right with no preconditions; no stipulations as to how and when the breach is required to be “found” so as to trigger deactivation and deprive access; and once triggered, in what circumstances access is to be denied and for how long.

38. These provisions have inherent qualities that may impact severely on the fundamental rights of owners and occupiers at a price that exceeds and outweighs the benefits they seek to achieve.

On the question of charging miscreant owners for the cost of pursuing the by-law breaches as a levy, the tribunals agreed that the words “as a levy” were inappropriate because strata laws stipulate how levies should be imposed and what they can be charged for. To be clear, the OC was allowed to charge the costs, but not collect them in that way.

The Appeals board then engages in a long discussion about how it could legally have cut the offending clauses from the by-law but why it chose not to do so. And this is where I take issue with this ruling and the whole NCAT system

In my humble and non-legal opinion, a by-law that says that non-residents may not have short-term lets, as per Section 137B of the Act, should not be completely revoked on the grounds that the Owners Corporation did not have a chance to vote on the by-law with two significant but basically procedural clauses removed.

The intent of the by-law is to dissuade investor owners from letting empty flats in their entirety as short-term lets. Removing those clauses would have made no difference to the by-laws’ fundamental intention.

As a result of the original tribunal finding, the two blocks involved have had no airbnb by-law in place for about five months and will continue to be unprotected until such times as they can plug the holes in this one, get it approved at a general meeting and then, possibly, subject it to the “suck it and see” processes of NCAT, should the affected investor choose to challenge it.

There has to be a better way.  There should be a system of pre-checks by a Tribunal panel of selected by-laws that address fundamental principles of strata law, although it has to be said there were at least three experienced and highly regarded strata lawyers involved in writing, supporting and challenging the by-law.

Part of the problem here was that the owners corporation took a pro-forma by-law and added their own specific clauses to it. While that makes sense due to the different specific circumstances in every strata scheme, it also presents potential problems like those evident here.

You can read the Appeals Board ruling HERE.