Further to our recent article about our team’s big NCAT victory in having an owner fined for Airbnb letting and winning a costs order (click here to view), a recent change in laws will have an even bigger impact on stopping short term letting. In the Estens decision from 2017, the Tribunal invalidated a short-term letting by-law, for breaching s139(2) of the Strata Schemes Management Act 2015 (SSMA), which says a by-law cannot prohibit or restrict the leasing of a lot. Many were critical of aspects of that decision, and it did not set a precedent other NCAT Members had to follow. However, that is all a moot point now. Owners corporations can decide if they want to be a building that allows Airbnb. Can a valid by-law ban short-term letting? This answer was not previously clear, but is now emphatically yes. Section 137A of the Strata Schemes Management Act 2015, passed in August 2018 by both houses of NSW Parliament, is at last now in effect. Section 137A says a by-law may prohibit a lot…
What can Owners Corporations do about Airbnb and short-term letting? The Madison Marcus Strata team recently had a big win in NCAT against an owner who was conducting Airbnb contrary to by-laws. The offending owner was fined the maximum amount ($1,100), and had a costs order made against him. The costs order was of far greater value than the penalty handed down. This means owners corporations can obtain worthwhile orders, meaning breach of by-law proceedings are worth pursuing. In the widely reported Estens decision from 2017, the Tribunal invalidated a short-term letting by-law, for breaching s139(2) of the Strata Schemes Management Act 2015 (SSMA), which says a by-law cannot prohibit or restrict the leasing of a lot. In the Estens decision, the actual by-law was not produced. Despite the win in our case, that issue from Estens remains. The key questions for owners corporation are: Given the Estens decision, is there a way to draft a valid by-law to restrict short-term letting? What is the best strategy for an owners corporation to deal with short-term letting?…
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