Can we create a bylaw banning Airbnb?

Lady Penelope said:
An OC would probably have more success legally with ‘regulating’ rather than ‘prohibiting’ short term holiday letting, as is explained in the legal commentary below.

I can see where you are coming from but I know David Bannerman pretty well and he generally takes a fairly conservative view on these things. Other lawyers have less pessimistic opinions.  The main thing is, until a by-law is tested in a higher court we have to remember that any lawyer’s view is just an opinion and not a definitive ruling.

However, the same law that prevents by-laws from interfering with “dealing” would probably stop you from directly regulating short-term lets. 

The only reliable avenue is if your council has zoned your building as “residential only” and then defines what residential means.  You can then pass a by-law that says you will enforce your zoning – that way you have not tried to supersede a superior law, you have simply agreed to support it.  

Some commentary from Bannermans Lawyers about short term letting in strata which may be helpful is outlined here:

Attempting to persuade the local Council to enforce planning laws can be a useful avenue, but this is dependent on the relevant planning laws and a motivated council. In many cases, individuals can bring their own actions to enforce planning laws, but this can be cost prohibitive, suggesting the need for council to be the driving force.

Yes, but many councils (such as City of Sydney) have decided not to pursue enforcement of their own zoning (at least until after the government passes its short term letting laws).  

That doesn’t stop owners from passing by-laws in support of existing zoning, and enforcing them.  You could be a long time waiting for your local council to act if they have neither the will nor the resources. But if you have a by-law, the choice of whether or not to take action is yours.

Making a by-law restricting such activities may be an option, but until the courts have considered the issue, this is a grey area and such a by-law might not be enforceable.

So why not pass the by-law and see what happens? A grey area works to your advantage too. Waiting for someone else to pass a by-law and then see what happens when it’s challenged and applying it to your building is leaving too much in other people’s hands. Pass your lawyer-approved by-law and see if anyone challenges it or, if need be, if NCAT supports it.  

The difficulty is that the strata management legislation prevents a by-law from prohibiting or restricting a lease or other dealing relating to a lot and that there is doubt about what this actually means. The limited case law to date suggests that these types of arrangements probably can be restricted by by-law. Of course, the more moderate the by-law, the more likely it is to be enforceable.

Again, this is an argument for passing a by-law rather than waiting for someone else to do the heavy lifting for you.  Note the phrase “restricting a lease” when it comes to the suggestions below.

A by-law regulating such arrangements, but not prohibiting them, would be more likely to be enforceable, particularly if the regulation was moderate.

I can’t see why that would be the case.  The law doesn’t establish degrees of “interfering with dealing”.  You can either pass a by-law or you can’t.  In fact, saying “we will allow short-stay letting under certain conditions” could be argued as more “interfering” than a by-law that simply says owners must obey council zoning.

For example, such a by-law might involve … OC approval being required for lettings outside specified parameters, e.g. length of stay, number of guests or to blacklisted guests (previous troublemakers) and the owner being responsible for ensuring compliance with by-laws, including any additional behaviour and other requirements imposed by the particular by-law.

To me, that goes way beyond what the law allows in terms of “interfering with dealing”. I don’t think you can be that prescriptive.

A by-law outright prohibiting short-term lettings would be less likely to be enforceable, but less so if the definition of “short-term letting” is reasonably tight.

I agree that a simple ban on short-stay letting is unlikely to be enforceable but I don’t see how specific restrictions on holiday lets would be less susceptible to a challenge.  Remember that phrase again  – “restricting a lease”.

Lady P adds:

Some suggestions that may have sufficient ‘teeth’ … a definition of  ‘short term’ in a by law may be  ‘a period of time that is not less than 7 nights and not greater than 90 nights’. This definition has restrictions but is not overly restrictive.  This definition would not permit people to stay in the building for a any time that is less than a week – hopefully should deter the bucks party crowd! Longer minimum periods could also be used (i.e. 10 nights) but must not be too long or they would be deemed to be too restrictive.

There is another principle of strata law, and that is you can’t pass by-laws that would supersede superior law.  The Residential Tenancies Act establishes residential tenancy as at least 30 days and many if not most councils define the minimum residential tenancy as three months.  We don’t get to set our own definitions – we have to take those established by superior laws such as the RTA and/or council by-laws.

A by-law regulating ‘short term’ letting  could make permission conditional on certain actions being undertaken by the owner e.g.

(1) that the owner obtains a written guarantee from each and every person using his apartment on a ‘short term basis that the person using the apartment and the common property will comply with all of the building by-laws such as no smoking on common property, noise, nuisance, parking, damage to common property etc, and …

That is already part of the SSMA under the occupants’ responsibility for the behaviour of guests and tenants’  and guests’ responsibility to obey by-laws and strata law.

(2) for permission to be granted to an owner by the OC to allow ‘short term’ letting that an owner (or an agent of the owner) must agree to be … contactable by the EC 24/7 and (c) must be proximate enough to the building to immediately go to the building when advised by the EC that a breach has been committed by the person in the ‘short term’ accommodation, and (d) must agree to personally and immediately evict the people in the ‘short term’ holiday accommodation at any time of the day or night should the person in the ‘short term’ accommodation be breaching any by laws, and (e) must agree to the possible revocation for a period of 6 months of the permission granted by the OC  if the owner is found to be in breach of this by law.

However admirable or desirable, I don’t think any of these can be part of valid by-laws. The law is skewed to prevent OCs from interfering with the way owners deals with their property.  It also has safeguards that prevent Owners Corporations from creating their own legal structure that goes beyond the law. 

I think as soon as you pass a by-law that says “you can have holiday letting but …” you have opened the door to holiday letting and a smart lawyer will knock over all the conditions that you apply to the permission by saying you didn’t have the right to create those conditions in the first place.

If your local council zoning doesn’t provide the basis for restrictions on short-stay letting, then the above might be worth a try.  But if there was a simpler option, grey area or not, I would take it.

Jimmy :

You stated “The Residential Tenancies Act establishes residential tenancy as at least 30 days and many if not most councils define the minimum residential tenancy as three months.”

It would be helpful if you could you publish the appropriate links.

I thought the RTA was explicitly ‘3 months or more’ ?

Any Sydney councils LEP state 3 months (as I have not seen any) ?

If a council LEP doesn’t, does it ‘default’ to the RTA ?

thnks

@pielover said:
Why should it be a case that someone has to take it to the NCAT to ‘see what happens…’ ?  

How else are you going to get a resolution?  You create by-laws and then “breach” residents for ignoring them.  But the only way you can impose fines for breaches is through the Tribunal.  Just because the law says something, it doesn’t mean people will obey it. There are no StrataKops. 

Is there an option to seek legal advice from the Attorney-General on the validity of a by-law. If the A-G says a proposed by-law would be valid, then you could be more confident in proposing it to a general meeting to be adopted and more confident that a breach notice would be upheld by the Tribunal, especially if you provide the A-G advice. 

An alternative to test the by-law after the adoption would be to arrange for someone to arrange a short term lease, perhaps even a committee member, for a breach notice to be issued and for that person to play devil’s advocate at the Tribunal. That could be quite openly presented as a test case, I would have thought. 

@pielover said:
Yes, but the 1st step is to ensure you have a ‘valid’ by-law to start with. The main issue at hand is the length of stay ie. a few days or a few months.

You have already answered your question in an earlier post (No10) in which you quoted Fair Trading: “The only way short-term letting can be restricted is by council planning regulations.”

If your strata scheme is zoned residential only and your council defines residential as 90 days minimum, than that is all your by-law can be based on. You can’t make up your own figures that are even less restrictive than the council’s because your strata scheme doesn’t have the legal authority to do that.

As for making sure your by-law is valid, you would surely go to your strata manager or a strata lawyer and ask their advice, wouldn’t you?

Done to death?  From a committee member’s point of view I think not.

Thanks to all the above for their obviously passionate contributions. 

My takeouts are:

• state and local governments have created this situation by studied neglect
• lawyers are the undisputed winners from the ambiguity and complexity
• the workload and responsibilities of voluntary committee members is ignored – there is no simple solution and they hold the ultimate responsibility on behalf of (rent-seeking?) owners – more work for the unthanked!
• what evidence is sufficient for a successful breach of bylaw action is a known unknown – for this low-level civil matter the gathering of evidence should be low cost and quick eg a website listing should suffice (photographs typically identify a residence) – Fair Trading should offer clear guidance here
• whatever solution is proposed it will be gamed/subverted to some degree.

Check out p12 letter of the July 2017 edition of The Beast (www.thebeast.com.au – July edition letters not posted at time of writing) “Illegal backpacker renting a joke” for another dimension of the problem.  How would a committee respond to this neighbouring property issue?

All together, it’s a totally unsatisfactory situation.