Short-term letting companies such as Stayz and Airbnb are a boon to some property owners but a bane to many resident Lot Owners and Committees.
These holiday rentals earn quite a bit of pocket money for owners. Even renters have been known to sublet their apartments (sometimes without the permission of their landlord).
Renting out an unused room (or apartment) for a night or two, seems like a win-win situation: someone gets a desirable place to stay and the owner earns a bit of cash.
Open the door to the ‘sharing economy’ and there are major issues for a Body Corporate or an Owners Corporation Committee to consider:
Noise and Nuisance;
Strangers to stay at your place… Short-term letting can provide a nice bit of income for Lot Owners, but it does have its risks.
One of the benefits of strata living is the opportunity to get to know the neighbours, and the security of quickly identifying who belongs and who doesn’t.
Security is at risk when lots are used for short-term holiday rental. Measures such as security keys and fobs are compromised when they are handed out, and potentially lost or not returned.
Noise and Nuisance
Most short-term stayers pass unnoticed and cause no trouble. Other people are nothing but trouble.
Parties held in short-stay units can have tragic consequences, as evidenced by the death in July of a young woman attending a party in one of Melbourne’s high rise buildings.
Even well-behaved guests can inadvertently cause a nuisance if they are unaware of the house rules and bylaws that govern a particular property.
Damage to common property is also a significant risk factor.
It can be of a catastrophic variety, such as caused by a mini-riot of party-goers, or the accelerated wear and tear on communal facilities, such as swimming pools, barbecues and gym equipment.
In either event, the Body Corporate or Owners Corporation will be required to pay the price in repairs to the common property and insurance claims which can be a recipe for resentment and dispute.
Communities need to satisfy themselves as to whether their existing Body Corporate or Owners Corporation insurance is adequate for covering short-term letting. If not, discussions with the letting Lot Owner over shouldering a greater increase in their insurance contribution should be canvased.
Can Short-Term Letting Be Banned?
In Queensland, the short answer is no.
A Body Corporate cannot pass a rule or bylaw which restricts the type of residential use of a property.
It can, however, enforce bylaws or rules which apply to everyone who occupies a lot – not just owners or permanent renters. E.g. Aspects of security systems and provision of occupier names and contact details to the Resident Manager.
Under current Queensland law, short-term letting is prohibited in Body Corporate schemes only where such use is contrary to the local planning scheme.
In NSW, the state government passed an amendment to the Strata Schemes Management Act. Owners Corporations can now pass by-laws to ban short-term letting in units where the host is not present, provided they get a 75 per cent majority vote.