This has been controversial particularly in strata title developments. The perception of “permanent” strata residents has been that short term occupancies are disruptive and sometimes actually damaging to strata property. This has led many strata developments to pass bylaws intended to prohibit short-term lettings which in many cases have been ignored by owners seeking to maximise rental returns from their properties. The issue has become whether strata developments can legally restrict short-term letting?
The NSW Department of Fair Trading view is/was that-
“Strata laws prevent an owner’s corporation restricting an owner from letting their lot, including short-term letting. The only way short-term letting can be restricted is by council planning regulations.”
This view was endorsed by a 2017 NCAT Tribunal decision which held that a bylaw restricting letting to a minimum of 30 days was unenforceable. However, a more recent Privy Council decision has taken entirely the opposite view.
Whilst decisions of the Privy Council are not directly binding upon NSW Courts and Tribunals, the view of most experts is that the decision will be followed when the issue next comes before a NSW court or tribunal. The decision dealt with legislation that was materially identical to the NSW legislation and it also referenced with approval a 2017 Western Australian Court of Appeal decision to similar effect.
A sensible balance needs to be struck between the interests of permanent residents and those seeking to utilise Airbnb arrangements. The NSW Government commissioned a parliamentary enquiry into the adequacy of regulation of short-term holiday lettings. The government response to the report of that enquiry is available on the NSW Government website- www.parliament.nsw.gov.au .
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