This article is an update on an article written by Allison Benson on short-term letting on 2 April 2020.
Code of conduct shelved
On 3 April 2020 in an unusual move, NSW Government has passed legislation to repeal the in-coming changes to the Fair Trading Regulation 2019 that would have implemented a code of conduct for owners who let their homes for short-term stays. The 3 April decision has not repealed legislation to make changes to the Fair Trading Act 1987 which creates definitions for short-term letting and has not repealed the changes to the Strata Schemes Management Act 2015 that allows owners corporations to pass by-laws to prohibit short-term letting if the lot is not the principal place of residence of the owner or occupier. Both of these changes will still commence on 10 April 2020.
What does this mean?
It means that owners corporation’s will still be able to put in place by-laws to prohibit short-term letting if the lot is not the principal place of residence. It also means that any breach of that by-law will be able to be enforced by the owners corporation by issuing breach of by-law notice and making an application to NSW Civil and Administrative Tribunal for enforcement and fines as provided for under the Strata Schemes Management Act 2015. To this end, owners corporations maintain a degree of power. However, the repeal of the code has substantially hollowed out the regulation of short-term letting under the Fair Trading Act since a breach of the code would have been an offence which was the regulative and deterrent mechanism government and other parties were reliant on. Without the code, there is no offence. And without the code, short-term letting continues (as it was prior to the proposed changes) without specific regulation under the Fair Trading Act.
Short-term letting during Covid-19 – an update for week beginning 6 April 2020
Government directives have clearly stated that people should not be outside of their homes for other than essential reasons, these include for work and education if it cannot be done at home, caring for others, exercise and shopping for essential items. However, for some people, staying away from their home may be essential for instance if due to the current crisis employees need to move to another location temporarily to be able to continue to work. This could happen if they are in a poor internet reception area and they need to have reliable internet to be able to telecommute or, if they are emergency workers needed at another location. We also note there are likely to be a number of tourists and nationals stranded and in need of accommodation because of border closes. It is reported that NSW Minister for Better Regulation, Kevin Anderson said there would be no ban on accommodation letting and, whilst it is not entirely clear, in statements made last week, the need for essential workers to stay away from their homes may have prompted the repeal of the Fair Trading Regulation code of conduct.
Whilst we all grapple which the raft of changes imposed on NSW in the last month including the above, what do the current directives, existing legislation and foreseeable legislative changes mean for owners corporations and short-term letting?
It means that lot owners can let their lots if it is their principal place of residence and the letting is for an essential purpose. They cannot be let to people holidaying or staying away from their home for non-essential purposes. At this stage, being stranded and self-isolating is not an essential service (it may remain to be seen whether self-isolating away from family members is indeed caring for others). It means that owners corporations can pass by-laws to prohibit short-term letting if the lot is not the principal place of residence for the owner or occupier.
If owners corporations wish to take advantage of the incoming changes to short-term letting on 10 April 2020 under the Strata Schemes Management Act 2015, they should amend existing by-laws or draft new by-laws.
Kerin Benson Lawyers can draft a by-law prohibiting to the extent possible short-term letting within your scheme for the fixed fee of $365.00. If you would like a quote or wish to discuss short-term letting for your owners corporation, please get in touch.
Allison Benson’s article on short-term letting and Covid-19 published on 25 March 2020 is available here.
Article authors: GL and AB.