November 2, 2018

New Regulations for Short Term Holiday Letting in NSW

The NSW Government has announced a new regulatory framework for Short Term Holiday Letting (STHL), set to commence in 2019 though a firm date has not been set.

STHL is a hot topic in NSW, all the way from Government House to the footpaths. Byron Bay has always been a holiday hotspot and we enjoy some fantastic tourism operators and welcome visitors to our towns as an important part of the local economy.

However, the rise of the ‘Uber’ or the sharing-economy model, has seen an increase in unregulated platforms for the private renting of residences for the purpose of short-term stays. Services such as AirBnB, HomeAway, Flipkey and Tripping.com (just to name a few,) look like they are here to stay and so new regulation is needed in order to ensure that the economic benefit of these arrangements will cascade down to our community as well as ensuring that what makes our community special is not affected by undesirable behaviour that is given opportunity in the absence of regulation.

The new legislation seeks to find this balance through three primary avenues:

  • Planning,
  • A mandatory code of conduct, and
  • Amendments to strata scheme management laws

The nitty-gritty detail is below.

Planning

Planning changes seem to carve out favouritism for STHL where the host is present.

  • If the host is present in an STHL, then there does not need to be a development application
  • The NSW Government is giving local council the power to set a 180 night annual limit on STHL where the host is not present

A Mandatory Code of Conduct

Normally these measures can feel a bit tokenistic or toothless, but this might be the exception that proves the rule.

  • The code will apply to key stakeholders including hosts and guests; but also online platforms and letting agents.
  • A “2 strikes and you’re out” policy will see stakeholders with 2 serious breaches of the code in 2 years banned from the platform for 5 years.
  • A strike will include any behaviour which unreasonably interferes with a neighbour’s quiet and peaceful enjoyment of their home.
  • The code will establish a complaints register to assess and adjudicate complaints
  • The creation of an ‘exclusion register’ for banned parties to prevent ‘platform shopping’.
  • Heavy Fines in place for failing to check the register or attempting to circumvent it
  • NSW Fair Trading will have increased powers to police platforms and investigate letting agents

Amendment to Strata-Management Laws

  • Regulation changes will provide much needed clarity on how community title lots can be utilised for STHL
  • Strata will be able to prohibit STHL, unless it is the host’s principal place of residence
  • Guidance will be availbale for owner corporations on how to manage STHL

According to local agent, Oliver Aldridge, “an encouraging sign from the marketplace is that at the moment only a small portion of the property purchasers that we are dealing with are planning to STHL.”

“Our experience on the front lines suggests that most people who are buying properties in the Byron Bay area are buying to live here – they love the lifestyle and want to call this place home.”

“Byron Bay and the Northern Rivers region is a unique and inviting place for many who want to make it their permanent home. Part of what makes our community special is that those who do become permanent residents of the region, tend to embrace a custodianship of the natural, cultural and social dimensions of life here.”