Strata and AirBnB

Hi all

I'm not a lawyer - just don't like injustice...

I was surprised by a bylaw in my building. They restrict lets under 6 months. This is to deal with short term letting. I told them that makes no sense because the act stipulates otherwise. I asked them to point me where in the act it says i cant let for less than 6 months. They said it needs to comply with council legislation where the building was designed for residential purposes.

I don't intend to do less then 3 months because my apartment was perfectly suited for corporate clients ad on this particular unit i don't intend to do less then 3 months. So after back and forth they agreed that bylaw they have is useless, but admitted they put it in place to scare other owners from doing short term letting..

So I was intrigued by this and started reading the strata schemes legislation STRATA SCHEMES MANAGEMENT ACT 2015

and found something in here as well as on fair trading website :
"Owners corporations can determine the by-laws that suit the preferred lifestyle of the strata scheme. A by-law must not be harsh, unconscionable or oppressive. No by-law is capable of restricting a dealing in a lot, including restricting short-term letting. By-laws cannot restrict children, and cannot restrict the keeping of an assistance animal"

I pointed this out to my strata mangers and they were stumped. Me being a smart ass I said I will do AirBnB and it looks like there is nothing you can do to stop it as long as I notify you of who is staying there (another requirement of the legislation). PS I will not do airbnb.

So even if strata does take people to NCAT - they should technically just dismiss the case, based on strata legislation?

I just wanted to hear others opinions on this? Especially if we have strata lawyers?

I think I might be in breach of running "serviced apartment" but this is in breach of planning laws, which should not apply in this instance. It would then be council that can take me to court, and not strata?

 

We had a strata meeting a few years ago in which airbnb was brought up (specifically our apartment which we had been airbnbing full time for about 6 months)- the majority of the strata committee were vehemently against it stating that anything that is under 3 months is banned under the strata rules. The interesting thing about this is a couple of people in the strata committee insisted this be written into the meeting minutes but our strata manager said she couldn't actually document it given it wasn't true. We ultimately stopped airbnbing as we moved into the apartment (which was our plan all along) even though technically they can't do anything about it legally. But they sure can be nasty about it if they wanted to (and technically call the council also)

 

@Excalibur, how do you get into corporate letting? Would be interested to find out more!

 

I'm a lawyer that has some experience in the area - and boy it is a complicated area.

You will need your own specific advice to get any proper answers unfortunately - lots of different legal issues at play.

 

It is a complicated area but don't forget your other obligations:

STRATA SCHEMES MANAGEMENT ACT 2015 - SECT 258
Tenancy notice to be given to owners corporation of leases or subleases
258 TENANCY NOTICE TO BE GIVEN TO OWNERS CORPORATION OF LEASES OR SUBLEASES
(1) If a lot is leased, the lessor must give notice of the lease, in accordance with this section, to the owners corporation not later than 14 days after the commencement of the lease.Maximum penalty: 5 penalty units.(2) If a lot is subleased, the sub-lessor must give notice of the sublease, in accordance with this section, to the owners corporation not later than 14 days after the commencement of the sublease.Maximum penalty: 5 penalty units.(3) If a lease or sublease of a lot is assigned, the assignor must give notice of the assignment, in accordance with this section, to the owners corporation not later than 14 days after the execution of the assignment.Maximum penalty: 5 penalty units.(4) The notice must be in writing and specifya) the name of the tenant and an address for service of the tenant, and(b) the date of commencement or assignment of the lease or sublease, as the case requires, and(c) the name of any agent acting for the owner in respect of the lease or sublease.

 

That is why its so interesting. It can be interpreted in many ways. I noticed that the law doesn't seem to keep up with the technology. Its almost as if it needs to be rewritten for 2018!

I'm glad you commented as I respect your opinion on this. I never intended of doing AirBnB in this place, but just wanted to see how many holes i could find in strata managers statements. It seems that they just go with what "feels" right and not what the law states.

 

I had corporate tenants previously in my unit as well as Department of defense officers (they get $800 subsidy for rental). I make unit appealing to those type of tenants. It has upsides, where i can charge $800 for a unit where everyone else in my building gets $650. Downside is the niche i'm targeting.

After my last tenant left my real estate agent (friends agency) was just waiting for people to come and everyone was saying its high rent. He was just not targeting the right type of tenants. I made calls to big 4 accounting firms HR department (helps to know people there). Told them of my apartment and took them through. All of them liked it, two of them didn't have anyone until mid Jan. One of them had someone willing to take it right away.

My wife is good at staging the places so that helps. I will never forget when we initially had the agent lease the place and he was saying 670-700. My wife told them 800, and we had 3 applications for that price. Sometimes you just need to know your target market.

If you are after that type of tenant, you need a very central and modern furnished apartment. I still have not found an agent that will go and get this type of tenant. Most put an ad out and wait. I like the go getter, someone who will chase. And i'm willing to pay for it.

 

As far as I know, there is actually a fair bit of legal certainty in most situations, because there has been a number of specific cases dealing with the issue. The trickiness comes from navigating the different 'layers' of legal schemes and which laws override the others in the event of some inconsistency.

I'd be very surprised if the 6 month bylaw held up though - as far as I know, the general 'line in the sand' between short stay let and a residential tenancy is a 3 month lease.

 

You might have to test this out in Tribunal, which in NSW is like spinning a chocolate wheel.

The SC will issue you with a breach notice in relation to their special by-law.

Then initiate formal mediatian. If that fails it's off to Tribunal.

Tribunal will issue (or not) an order to comply with the Special By-law.

FYI, a specialist strata lawyer in NSW will cost about $550 inc GST per hour.

Do your sums, roll your dice.

Let us know how you go.

Assuming you have a Strata Committee that has some testicular fortitude, it should be compulsory reading.

 

This might also be of some use... Why this Airbnb court ruling in the Caribbean could affect rules in Australia

 

This subject is very current. I have read a little on the subject. The general opinion seems to be that the body corporate can't do much about it even though they prohibit short term rental ."They can't come inside your unit" What i want to know is can the body corporate prohibit the use of the common area facilities. eg. pool?

 

It depends. Do you have electronic access to these areas, or a garden variety key?

And what does common area access have to do with "...inside your unit"?

 

I think in April they will make a "ruling" on it or they might delay it further....

 

Thanks Ted. Can the on sight manager stop Airbnb's using the pool being on common area?

 

It is possible. In the building where my unit is they forbid anyone but the owners or tenants from using the pool.... but then again it might be a bit over zealous to enforce that unless you bring 10 people with you.....

 

I agree with @Excalibur1 and it would depend on how diligent your strata committee (or the Qld equivalent) are.

After all, there would be extra "wear and tear" on common property due to the Airbnb lot owner conducting a business (as opposed to sharing their accommodation...) and the Owners' Corporation should be compensated for that.

There are no reasons why all the other owners should be forced to bear the extra cost of another owner's profit centre, and that other owner should have the extra expenses charged back to their lot.

And hopefully the Airbnb owner would not adopt an ambivalent attitude in regards to this, as the Strata Committee has some options they can consider to deter the loss of amenity the Owners Corporation then suffers.

 

I find that there was less wear and tear when i had airbnb guests than long term tenants.
airbnb guests tend to spend most of their time outside and only come home to sleep.

 

It will depend on which State the property is located in, however the most common outcome is that a body corporate cannot restrict a person from letting through Air BnB.

The issue that most face is that it is not always lawful under town planning and sometimes also building regulations.

 

Thanks for your input @JDM

I noticed that it is rare that they action if breaking that law.

You are correct about strata not having power in this regard. However with new strata laws that were passed through recently, on there it does say that they can restrict short term letting... so im a bit confused...

 

It is going to depend on the State whether the body corporate/owners corporation can lawfully restrict Air BnB. I know in Queensland they are in the process of changing the planning legislation to deal with Air BnB better as well.