Does submitting a council DA to allow short-term rentals require a special resolution

Taking City of Sydney (the council with the most strata schemes) as an example, their website and forms require “verified consent from all of the registered owners” before a DA can be submitted.  

Now, the Owners Corp is not the registered owner so it seems like there may even have to be a unanimous agreement for a change of use DA (although I could be wrong) but, at the very least a special resolution.

Also, Note 6c on the City of Sydney DA form says an application for a DA from a strata scheme must be accompanied by a “copy of resolution or minutes showing that a special resolution has been passed at a general meeting of the owners corporation that specifically authorises the change to common property.”

Any change of use would have an impact on common property so, again, at the very least a special resolution would be required.

Also, I suspect you would have to change your by-laws to accommodate short-term letting, so there is another special resolution requirement.

I would say that if your secretary puts this motion to a meeting and it isn’t as a special resolution you should move to have the motion removed from the agenda as it is incompetent and a breach of strata law. 

A smart EC would get some legal advice before pursuing this.  

Other councils may have other rules but they tend to be standard and governed by the Local Government Act.

Have you considered that you would need to retrofit the entire building at massive expense?  See Building Codes of Australia Class 2 and Class 3.

You’d be dropping the value of all Lots in the property by an estimated 25% – our building has just had short-term letting sent away to hell, where it belongs, and already we’ve seen a great jump in property prices.

There’s a precedent where a Residential block in the City of Sydney wanted to do what is planned here.  City of Sydney refused to change the DA, obviously wanting to maintain the housing stock in the City, and the applicants took the Council to the NSW Land and Environment Court.  See NSW L&EC No. 10576 of 2006 187 Kent Street Pty Limited v Council of the City of Sydney:  application to convert 128 residential units into dual use residential/serviced apartments: “…in that appropriate amenity cannot be provided with a mix of residential and serviced apartments that share the same floor and access points…I find the proposed development is unacceptable…”

The residents in our Residential strata building – tenants and owner/occupiers – can attest that short-term letting and permanent residential accommodation isn’t in any conceivable way a ‘compatible use’.

Why would you want to trash a Residential property by turning it into a quasi-hotel?  Oh, short-term, quick cash?

Think long-term.  The plan to cash in on short-term lets is, in my opinion, a stupid, uninformed – and/or extremely selfish – idea.

You have answered your own question – if there is not change of use, why do they require a DA?

The establishment of the change of use can be found in the result of the Land & Environment Court findings with regard to City of Sydney’s case against Australian Executive Apartments and its operations in the Bridgeport building.

The LEC found that short-term lets could not be conducted under the terms of the Residential Tenancies Act and therefore were illegal because the building was zoned residential only.

Every aspect of a building’s operations is related to common property, including access, lifts, electrical supplies, water provision, sewage, lighting and maintenance. Short-term letting puts extra strain on many of these resources.

Also, there are special requirements for holiday lets, such as emergency exit signage and parking, all of which affect common property.

Go to the meeting and if the motion is not a special resolution, tell the chairman you will challenge any affirmative result both at council and at NCAT.  I would also ask him to resign as he is leading the building into areas that will cost you all a lot of heartache (and possibly money) without checking his facts.

By the way, what does your council’s DA form say about strata applications? Is it the same as City of Sydney?

JC – notwithstanding the differing approach to Strata Development Applications by Councils (about which I’m not surprised), Clause 49(1) of the NSW Environmental Planning and Assessment Regulation (2000) provides that a Development Application (DA) may be made by the owner of the land to which the DA relates or by any other person with the consent, in writing, of the owner of that land.

There’s no doubt in my opinion that the Owners Corporation (O/C), as the entity / collective of all lot owners is the “owner of the land”, so the resolution of your conundrum comes down to what numbers of owners voting in favour of submitting the DA constitutes a consent by the O/C as a whole, and whether the change in the use of the Scheme to permit short-term occupancy is covered by the provisions of Sect 65(A) of the NSW Strata Schemes Management Act.

The easier answer first – with regard to Sect 65(A), it prescribes that a special resolution is required for an O/C’s prior written consent to any addition or alteration to, or to the erecting of a new structure on the common property, and as much as I’d like to agree with your preferred position and that of others who have commented on this, I don’t think that a proposal to change the use of lots in a Scheme is captured by this Section, that appears to me to relate just to physical changes involving common property.

So to the second matter concerning the required numbers of owners voting in favour of a motion to change of use of lots and consequently to be in favour of submitting a DA to Council. If I can change the scenario slightly to one where a developer had completed and sold part of newly built Scheme, where an O/C had been formed, and where that developer then wished to amend the Development Contract (DC) that they’re required to submit to Council following its approval of their DA.

If the developers proposed amendment to the DC involved a change to the use of any completed/sold lots or more commonly to lots in the next stage of the development, then NSW Land & Property Information (L&PI) would require any such application to be accompanied by evidence of a supporting special resolution of the O/C.

So maybe contact L&PI to ascertain if their requirement for evidence of a special resolution of the O/C to be provided by a developer in the above scenario would similarly apply to your circumstances.