Can my Strata Ban Airbnb? Understanding Short-Term Rental Laws
Short-term rental arrangements are a common and often contentious issue in strata schemes. While many property owners want to maximise the use of their property, owners corporations may have concerns particularly around building security and the potential for disruptive behaviour.
Navigating these situations requires a balanced approach. Owners corporations must consider the interests of all residents, while individual owners are entitled to reasonable use of their property.
Your strata manager is here to help. We can provide guidance on current regulations, help interpret your scheme’s by-laws, and support you in finding solutions that work for everyone involved.
What does the legislation say?
To determine whether you can use your lot or unit in a strata scheme for short-term rental accommodation, you first need to understand the legislation that is in place. Section 137A of the Strata Schemes Management Act 2015 sets out the restrictions on what by-laws can be put in place by an owners corporation regarding short-term rental accommodation. This section has two parts which both allow a by-law to ban short-term rental accommodation and prohibit it.
The key to whether a by-law can ban short-term rental accommodation depends on whether the lot or unit is the principal place of residence for the person who is giving another person the right to occupy the lot via a short-term rental accommodation arrangement.
An owners corporation is allowed to have a by-law in place prohibiting short-term rental accommodation arrangements if the lot is not the principal place of residence for the person who is giving another person the right to occupy the lot via a short-term rental accommodation arrangement.
A by-law has no force or effect if it prevents a lot from being used for the purposes of a short-term rental accommodation arrangement if the lot is the principal place of residence for the person who is giving another person the right to occupy the lot via a short-term rental accommodation arrangement.
What is a short-term rental accommodation arrangement?
A short-term rental accommodation arrangement for the purposes of the Act is a commercial arrangement for giving a person the right to occupy a residential premises for a period of not more than 3 months at any one time.
What is considered a principal place of residence?
The Act does not define what is considered to be a principal place of residence. When by-laws have been challenged at the Tribunal, they have relied on the definition of principal place of residence that is provided in the Land Tax Act 1956 (NSW). An extract of section 5B of the land Tax Act has been included below with this definition.
The person must use and occupy the land as the person’s principal place of residence for a continuous period of 200 days in the land tax year. This requirement is referred to as “the residence requirement”.
I understand the legislation, now what?
Now that you have an understanding of the legislation in place regarding short-term rental accommodation arrangements in strata schemes, have a review of your buildings by-laws to see whether there are any relevant by-laws that may apply.
If you’re unsure whether a specific by-law allows for short-term rental accommodation or whether your lot would be considered your principal place of residence, you can contact your strata manager who will be happy to assist.