Changes proposed to short-term holiday lettings in NSW

The onset of the ‘share economy’ has seen a number of disruptive online booking platforms such as AirBNB shake up the short-term accommodation industry and this has resulted in a call for stricter legislation.

It appears the legislators are listening.  A three pronged approach has been proposed entailing:

1. A code of conduct for agents, hosts and guests
2. Increasing owners’ ability within strata corporations to limit AirBNB type uses of lots
3. Giving Councils greater planning powers in relation to this type of use.

The NSW Minister for Innovation and Better Regulation, Mr Kean, announced earlier this month a few changes to short-term letting in NSW, an industry that on some estimates contributes $31 billion per year to the Australian economy.

Part of these reforms is the introduction of a mandatory Code of Conduct that will govern online accommodation platforms.

“The Government’s short-term holiday letting plan will support the sharing economy and give consumers more choice while cracking down on bad behaviour”, Mr Kean said.

The mandatory Code will cover letting agents, hosts and guests will address impacts like noise levels, disruptive guests and effects on shared neighbourhood amenities.

While NSW Fair Trading will have powers to police online platforms and letting agents, the Code will also include a new dispute resolution process to resolve complaints.

“Under our ‘two strikes and you’re out’ policy, hosts or guests who commit two serious breaches of the Code within two years will be banned for five, and be listed on an exclusion register,” Mr Kean said.

“These provisions strike the appropriate balance between permitting individuals to use their homes within reasonable limits with the need to protect the interests of neighbours,” said Kean.

It is to be seen whether such an approach will have any effect on guests who may be able to use the identity of others to book properties.

Additionally, under this new rule, strata owner corporations will have the power to introduce by-laws, potentially preventing short-term letting in their block if the host does not live in the unit they are letting out.

In a press release, Minister for Planning and Housing Anthony Roberts said new state-wide planning rules would also code into force, including:

• Allowing short-term holiday letting as exempt development 365 days per year when the host is present;
• When the host is not present, a limit for hosts to rent out properties via short-term holiday letting of 180 days in Greater Sydney, with 365 days allowed in all other areas of New South Wales;
• Councils outside Greater Sydney having the power to decrease the 365 day threshold to no lower than 180 days per year; and,
• Certain planning rules will apply to properties on bushfire prone land.
• The changes also limit hosts based in the greater Sydney area to rent out their homes for up to 180 nights a year

The 180 days a year limit approximately equates to weekends, school holidays and public holidays which allows letting agents and accommodation providers a fair chance to let out their properties.

These changes will be relevant for many in our region.  Strata managers and owners corporations, in particular, will need to understand what they may do to respond if AirBNB hosts and guests are adversely affecting their lifestyle and the limits that may be imposed.