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There’s been a lot said and written about Airbnb-style short-term lets in apartment blocks – not least in this column – but where do you draw the line between enjoying the “sharing” economy and people just exploiting their investments (and the bits they share with neighbours) for their own profit.
Most people agree that renting out your entire apartment short-term as a business, in buildings that are zoned residential only, should be forbidden. That’s before we even get into issues like income tax, commercial council rates and insurance.
But moving down the scale a little, how about the students who want to let out their unit when they go away during their long breaks? They’re making a profit, for sure, but it’s really just to supplement their meagre finances.
How about people who rent a room in their flat, but they are still there on the premises? It’s a great way for visitors to meet locals and get to know the city through their eyes. But it’s also still a short-term let.
And what about house-swappers? These people go on to registries to swap homes for a few weeks for a holiday. They aren’t making a profit but they are saving on hotel bills. And they’re introducing into their unit block new people who may not know or care about by-laws or restrictions on their behavior.
And then there are the pet-sitters, people who stay in your flat while you are away, water your plants, feed your cats and walk your dogs. And while they may not be paying anything for the privilege, they are non-residents of the building, there for the short term.
It’s a question that has our politicians puzzled, despite enthusiastically embracing the broad concept of the “sharing economy”, if their endorsement of Uber-X taxi alternative is any sign.
“The shared economy is a reality that governments can’t ignore and there is a responsibility to put in place appropriate controls to enable it to grow without negatively impacting on others,” says Sydney MP Alex Greenwich.
“There is a difference between letting one’s home for a few weeks while travelling and turning apartments into hotels. We have to make sure the benefits of the shared economy are not hijacked by some to make a profit at the expense of neighbours.”
So where would you draw the line? Have your say here, on the Forum.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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There’s a rumour that if someone in your building is letting via AIrBnB, your insurance may not cover you if there is some disaster in the AirBnb apartment, such as a fire or a water event. Any info on this?
Gillian
Everyone will have a very different opinion on short-term letting and all opinions are worth respect.
From the experience in our Residential building – an imagine this replicated State-wide if the NSW Government gives this practice the ‘go ahead’ – a group of investor owners used the building’s Caretaker to rent their apartments short-term, from the very beginning. This is back in the days where the internet was in its infancy and none of us knew anything of Council Planning Regulations. The number of units grew and grew and because one ‘team’ was doing it, they weren’t in any position to stop anyone else. We ended up with on or about 65 units that were short-term let (minimum one night) plus there were a couple of operators with adverts which made it impossible to identify the units they had control of.
Unless someone has lived with this type of activity, I think it is impossible to comprehend what it does to someone’s home life; short, it is destroyed.
When you have such a big block involved in short-term lets they come in and take over complete control of the Strata. Resident Owners/Tenants are then regarded as ‘the enemy’ and have no say whatsoever in the day-to-day finances and running of the property. And some very powerful people can and do start issuing very serious threats when they see their finances potentially compromised.
Cancer: are you happy with one cancer cell floating around your body?
Go figure, and good luck
Gillian – in order to cover our bases I contacted our building’s insurers a couple of years ago to advise that five (5) of the Lots in our self-managed Plan were then available for holiday / short-term occupancy.
The insurer’s representative told me that those details would be noted on our Policy, and that as the level of holiday / short-term occupancy was only around 20% of building’s total Lots, that no change to the extent or nature of our cover or to our premium would result.
I queried what percentage of that type of occupancy would affect our Plan’s cover and premium, and the insurer’s advice was that it varies from one geographic area to another. No other specifics were provided.
So my advice would be for owners corporations to fess-up, and to take into consideration that any increased premium that consequently arises can be recovered from the proprietors of Lots within N.S.W. whose activities gave rise to that increase.
77. Effect of use of lot on insurance premiums
If the use to which a lot is put causes an insurance premium for the strata scheme to be greater than it would be if it were not put to that use, so much of a contribution payable by the owner of the lot as is attributable to insurance premiums may, with the consent of the owner, be increased to reflect the extra amount of premium.
Note the sting-in-the-tail though, where those proprietors would currently need to agree – so just hope they’re unfamiliar or feel obliged to comply with Sect 77 the NSW Strata Schemes Management Act or perhaps wait until July 2016 when the new Act commences, where O/Cs may then seek Orders in the Tribunal against those proprietors who unreasonably refuse such an arrangement.
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