The NSW Government recently announced a new regulatory framework to govern the short-term holiday letting industry. Short-term holiday letting has rapidly expanded in recent years due to the growth of online booking services such as Airbnb and HomeAway (previously Stayz).
The new regulatory framework is designed to ensure that local communities continue to gain from the vast economic benefits of short-term holiday letting, while protecting neighbours and communities from anti-social behaviour.
What is the new framework?
The new framework includes new planning laws, an industry Code of Conduct and new provisions for strata scheme by-laws.
Code of Conduct
A mandatory Code of Conduct will be introduced that will apply to anyone involved in providing or using short-term holiday letting including hosts, guests, online platforms, and letting agents.
The Code will establish a ‘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 years. Platforms and letting agents will not be permitted to offer services to anyone, or any dwelling, that is listed on the exclusion register.
A strike will include any behaviour which unreasonably interferes with a neighbour’s quiet and peaceful enjoyment of their home.
The Code will also establish a complaints system, which will be available to neighbours of short-term holiday letting premises, strata committees and owners corporations.
Complaints will be assessed by independent and impartial adjudicators, approved by the Commissioner for Fair Trading. Adjudicators will be required to make decisions on evidence and after giving both complainants and respondents a chance to put forward their case.
Strikes will be recorded on an online register to ensure that guests and/or hosts cannot ‘platform shop’. Platforms and property agents will have to check the register before taking on new customers. Failure to do so may result in significant penalties of up to $1.1million for corporations and $220,000 for individuals.
NSW Fair Trading will have powers to police online platforms and letting agents. The Code, its enforcement, the compliance system and the register will be funded by industry.
What about strata schemes?
Existing strata scheme management laws will be amended to clarify that by-laws can prohibit short-term holiday letting, but only for lots that are not a host’s principal place of residence.
That is, if a host is genuinely sharing their home, they will still be able to use a spare room for short-term holiday letting, and will be allowed to let out their principal place of residence while they are away on holidays.
NSW Fair Trading will also develop guidelines to advise owners corporations on how they can use other existing strata laws to help deal with short-term holiday letting.
When will the new framework start?
The NSW Parliament passed the Government’s short-term holiday letting reforms on Tuesday, 14 August 2018. The new framework is expected to come into effect in 2019.