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Holiday Letting by-law: The great debate
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JimmyT
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Six strata law experts give their take on whether we can create by-laws enforcing our residential-only zoning.

My story in the Sydney Morning Herald at the weekend about Fair Trading saying you couldn’t have a by-law restricting holiday letting – even if the by-law only said it was supporting your residential-only zoning – put the strata approved cat among the never-to-be-fed pigeons.

So I asked a panel of lawyers what they thought. First, below is what Fair Trading said to me last week (which formed the basis for my story):

Owners corporations and/or lot owners should seek independent legal advice about the validity and applicability of current or proposed by-laws.  ​

Section 139 (2) of the Strata Schemes Management Act 2015 states that no by-law can prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot.

Legislative regulations, including council regulations, can only be enforced by and at the discretion of the relevant authority, or delegated authority, tribunal or court, as identified in their governing legislation. 

Meanwhile, someone pointed out that section 18(1) of the model by-laws included in the Strata Regulations says you can't use the lot for a purpose prohibited by law.

18 Compliance with planning and other requirements 

(1) The owner or occupier of a lot must ensure that the lot is not used for any purpose that is prohibited by law.

But doesn't that validate the by-law that supports residential-only zoning?

Is Fair Trading right that by-laws are invalid?  Or is there a fatal flaw in the model by-laws? Or both?  I asked a flock of  legal eagles what they thought? Some disagreed, some agreed - but in different ways.

Click on the page numbers below the 'sharing' buttons to find out what they said:

David Sachs, Principal of leading strata law firm (and Flat Chat sponsors) Sachs Gerace Broome.
Having a by-law that prevents a lot owner or occupier from using a lot in an unlawful way is not "enforcing"Council regulations, it is applying those regulations to the strata scheme.
There are heaps of examples of non-government organisations doing this - the Law Society can strike off a solicitor who commits a crime. The common law has long recognised that a person can sue for damages if another person breaches a statutory duty.
By-laws should be consistent with the law.  It is when they conflict with it, there is a problem.
If the department is correct, the whole penalty system for by-law breaches is invalid.

Stephen Goddard of Goddard & Co Solicitors (and spokesman for the Owners Corporation Network):

The Office of Fair Trading (OFT) is correct.  Section s.139(2) of the Strata Schemes Management Act renders any by-law prohibiting or restricting the leasing of a lot as invalid.

The Parliament has included a restriction like that in s.139(2) in all strata legislation since 1961.  The public policy motive behind that restriction was to address a perceived need to distinguish strata title from company title.   Under company title, an owner could not lease an apartment unless the Board  of Directors for the company approved of the tenant.

That historic concern to prevent obstacles to residential leasing of strata lots remains legitimate.  But section 139(2) needs to be amended to enable owners in general meeting to have the democratic right to decide whether or not short term letting will occur in their building.

It is a relief to see the OFT at long discharge its duty to the public interest by acknowledging short term letting is an issue in the strata space.  For too long the OFT has ignored short term letting as a change of use in the strata space for which Owners Corporations are struggling in a sea of forced illegality.

Failure by the Government to remediate the issue now acknowledged by the OFT will only result in a degrading of public confidence in strata living as a lifestyle of choice in our community.

Amanda Farmer of  Your Strata Property:

It has always been the law that a by-law is not "capable of operating to prohibit or restrict the...lease..." of a lot. It is currently section 139 in the 2015 Act; it was section 49 in the old Act. It is nothing new.

Fair Trading now makes reference to it in their Strata Living Handbook. So what? A handbook is not a legislative instrument or jurisprudence. It does not make or change the law.

For Fair Trading to say that by-laws which restrict holiday lets are "invalid" is to apply their interpretation of section 139. It is not Fair Trading's function to interpret the law. It is the function of courts and tribunals. Fair Trading can tell owners what the law says. As any lawyer will tell you, determining what it means is a different exercise altogether...

Fair Trading's statement (as quoted in your column on the weekend) is unhelpful and has unnecessarily sent many buildings that have these by-laws in place in to a panic.

Neither the courts nor the Tribunal in NSW have yet determined the question of whether by-laws prohibiting short term letting are valid.

Interestingly, in June this year the Court of Appeal in Western Australia did determine the question, upholding a by-law prohibiting short term lets in a local government area where short term letting was permitted, subject to Council approval. Here's the case. The lot owner in question had the approval of the Council to short term let, but the building enforced its by-law and prohibited the practice. The building won.

Western Australia has a very similar section to our section 139 - (ie, along the lines "no by-law is capable of restricting the lease of a lot...") The WA Court of Appeal held that the by-law which prohibited short term lets was not restricting the lease of the lot, it was just restricting the term of the lease. Interesting interpretation, huh?

NSW Courts have interpreted this part of our strata law along similar lines in the past (just not in relation to the short term letting debate). It will only be a matter of time before the NSW law is explored with respect to short term letting and we will hopefully have some solid guidance.

Until then, it is not correct for Fair Trading to be "confirming" that strata by-laws which restrict short term letting are "invalid". We don't yet know if that's what the law means and eager lawyers will be debating it both ways when the time comes.

It is also not correct, in my view, for Fair Trading to say that "bylaws telling owners they must abide by local council zoning restrictions are invalid because only local councils can enforce their zoning" (quote from your article). Isn't that like saying: only the police can charge someone with assault, so a by-law that says "don't punch your neighbour in the head" is invalid. No one would think twice about that kind of by-law (save that it may be stating the obvious...).

James Moir of Polczynski Lawyers:

It is disappointing that this type of information is released by Government agencies.  It is only partly correct. 

Section 123 of the Environmental  Planning  & Assessment Act specifically says anyone can bring proceedings for a breach of that Act, whether or not their rights are infringed by the breach.

In the Land & Environment Court case of Dobrohotoff v Bennic, a neighbour in Gosford did exactly that.  The Dobrohotoffs successfully argued that the Bennics were conducting short term letting next door without council permission, in breach of the Environment Planning & Assessment Act.

The purpose of a by-law saying something similar is that it allows owners corporation to take NCAT action for a breach, rather than the more costly Land & Environment Court action.

Further, standard by-law 18 in Schedule 3 to the 2016 Regulation (by-laws for new schemes), says:

18   Compliance with planning and other requirements: (1)  The owner or occupier of a lot must ensure that the lot is not used for any purpose that is prohibited by law. (2)  The owner or occupier of a lot must ensure that the lot is not occupied by more persons than are allowed by law to occupy the lot.

This shows the Government does want owners corporations to be able to take NCAT action for planning breaches.  The extension of model by-law 18(1) is that an owner or occupier should not use their lot for any purpose that requires approval, without that approval.

On the issue of short term letting, I agree that a by-law banning leases of less than 3 months breaches s139(2) of the Strata Schemes Management Act 2015.  However, the better short term letting by-laws do not approach the issue in that manner.

An OC can ban the type of use to which a lot is put, and this approach has been upheld by the Supreme Court in cases like Salerno (smoking) and Hamlena Pty Ltd v Sydney Endoscopy Centre Pty Ltd (medical uses).

The Court said that whilst such a by-law might reduce the pool of potential lessees and purchasers, it does not offend the prohibition on by-laws that restrict leasing and transfer.  If a by-law can ban those uses, there is no reason why it cannot it can ban commercial uses such as Airbnb.

There is however one exception to this broad scope for by-laws.  If an owner obtains development approval (DA) for that use, the DA “trumps” the by-law (s28 of the EP&A Act and clause 1.9A in most Local Environmental Plans).

Accordingly, if an owner obtains council approval for short-term letting or Airbnb, no by-law can prohibit it.

Tom Bacon of Strata Title Lawyers
In my view, the Minister's comments are problematic. Contrary to what Fair Trading and the Minister set out to do, these latest comments have not clarified the situation, but only muddied the waters further still.
The Minister's own government, in passing the 2016 Regulations, included a Model By-Law under Schedule 3 which on its face, requires owners and occupiers to comply with town planning laws, which include the zoning requirements and the LEP (local environmental plan).
In an appropriate case, if an OC were to seek to enforce this Model By-law via a Notice to Comply and at NCAT, in my view the Minister's comments (and Fair Trading's handbook) would not prevent the Tribunal from finding in favour of an Owners Corporation, should it correctly prosecute the case.
The model by-law is clearly enforceable under Part 7 of the SSMA 2015, and it is business as usual for strata lawyers and owners corporations as far as I'm concerned.
If the government were to rescind Model By-law 18, then that would be a different story, but unless that happens, the Minister's and Fair Trading's comments will have to be viewed through a prism, as being persuasive but not binding.

Dr Cathy Sherry Associate Professor, UNSW Law,

and author of the new book Strata Title Property Rights: Private governance of multi-owned properties (also available via Amazon Kindle)

I think that Fair Trading is right. The section is very clear and has been in the Act since its inception in 1961. It was designed to prevent the re-emergence of the problems that existed in company title. First, the transfer of shares in company title requires board approval and boards may refuse to approve some purchasers, ie vetting.

Banks did not like this because if they wanted to exercise a power of sale on mortgage default, they just want to be able to sell to the highest bidder and not have to wait around for board approval, which may not be forthcoming.

Because banks considered company title riskier, they were reluctant to lend money for the purchase of a company title unit and that reduced the pool of people who were able to buy and reduced the amount they were able to pay. By prohibiting any restrictions on transfer, such as requiring owners corporation approval for a sale, the section widens the pool of potential purchasers, increasing bank willingness to lend and in turn increasing the value of strata apartments.

Second, company title units frequently restricted letting altogether or required board approval of prospective tenants. This might have increased the value of apartments to a class of purchasers, but markedly decreased its value for investors or people who might need or want to let their apartment at some point.

I suspect it is pretty rare for any of the small number of remaining company title buildings to have blanket bans on letting anymore. It is too economically damaging. The strata title legislation was designed to prevent the potential economic damage to property values that can (but not necessarily) flow from bans on leasing.

This is in no way a new issue. The United States has struggled with it for decades. Bans on leasing used to be much more common but became less popular because they depress values.

Of course short-term leasing is a specific type of leasing, but the general concern remains the same. If people cannot put their property to its highest economic use, which might be short-term leasing, it can depress values. But as you are no doubt thinking, not always; it would increase property values for homeowners and many tenants.

Sorry to sound like an academic lawyer but this is the eternal double-edged sword of private land regulation – it can increase values and be beneficial for some but it can decrease values and be detrimental to others.

The source of the problem is negative gearing and the partial capital gains tax exemption. This has resulted in 50% of apartment stock being owned by investors. A far cry from the ‘home units’ they were initially marketed as. Not surprisingly many investors are only interested in the highest economic return.

There is no easy answer to this dilemma but the answer that the strata legislation very clearly gives is that other owners have no power to restrict an owner’s ability to lease their property.

That said, the model by-law is perfectly valid and I don’t see why you could not enforce it against someone if they are breaching planning law. If the zoning genuinely prohibits short-term leasing, I can’t see why that by-law could not be enforced.

Further, under s123 any person can bring an action to restrain a breach of the Environmental Planning and Assessment Act 1979; it is not the case that only local councils can ask a court to enforce planning law. The ‘Terrigal Party House’ case, Dobrohotoff v Bennic [2013] NSWLEC 61, was an action brought by homeowners in Terrigal, the Dobrohotoffs, to restrain their neighbour, Ms Bennic, from using her house for short-term letting.

The Dobrohotoffs were successful because Justice Pepper held that the use of the property was not sufficiently permanent to be a "dwelling-house" under the local zoning. Justice Pepper was also extremely critical of Gosford City Council for not clarifying the ambiguity in their Local Environmental Plan about what constituted a ‘dwelling’.

If owners corporations believe that people in the building are using apartments in violation of zoning, they might be better off not fussing with by-laws and going straight to the Land and Environment Court. It is important for the strata world to remember that they are part of the wider legal system, subject to it and able to take advantage of it. Short-term letting is not strata-specific; it is a thorny issue for many non-strata property owners too.

I know that might sound nutty given all I have said above, but as I say to my students, law is not a soup pot, it’s a bento box. You don’t just dump all the law in one pot and stir it around. You have to think about how different areas of law related to each other, but they remain distinct areas of law.

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tharra
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Why isn't the solution to this mess sheeted back to the purveyors of short term lets like AirBNB? Currently they put the onus on hosts to comply with all legislation:

https://www.airbnb.com.au/help/article/806/how-should-i-talk-to-my-neighbors--homeowners-association--or-landlord-about-airbnb

How about allowing Owner's Corporations/local councils the ability to blacklist  addresses. When a host comes along who fails to check whether they're a permitted host they're presented with a "planning legislation doesn't permit short term lets at this address" notice?

This may also be of interest:

"Aimco Steps Up Litigation Against Airbnb: Complaint Seeks Class Action Status on Behalf of Property Owners Harmed by Airbnb"

https://www.bizjournals.com/prnewswire/press_releases/2017/06/07/AQ11529

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11/07/2017 - 10:44 am
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tharra said
Why isn't the solution to this mess sheeted back to the purveyors of short term lets like AirBNB? Currently they put the onus on hosts to comply with all legislation.

Right at the start, a couple of years ago, I remember an Airbnb flack telling me that they "made sure" their hosts complied with local laws.

When I pressed them on this, it turned out "making sure" was asking them to tick a box saying they were allowed to let their apartment.

"So," said I.  "What if the owners corporation sends you a copy of their by-laws and a copy of their zoning to show the host does not have permission?  What do you do then?"

That's between the host and their owners corporation and council, said the Airbnb person, adding that if anyone had a complaint about an illegal airbnb let, they would pass it on to the host - and that's all.

It is this carefully cultivated and religiously maintained grey area that has allowed airbnb to spread and flourish around the world.  Individual greed and lack of corporate responsibility matched with a robustly nurtured mythology of "helping ordinary people to share their homes" have created a monster.

But it's interesting what happens when an even bigger monster enters the arena.  Last year the City of London told airbnb that they didn't care about the letting agency's "privacy policies".  

If airbnb couldn't control holiday letting of homes that were supposed to be residential, then the council would.

Guess what happened.  Airbnb in London, unlike anywhere else in the world, agreed to de-list properties that breached the council's limits on holiday lets.

It's a shame that our councils and politicians here in Sydney can't wait to roll over and let Airbnb tickle their tummies. 

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Jane
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11/07/2017 - 3:05 pm
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This is an excellent discussion but could one or more of the legal teams please express their view on whether a short term let via a platform like AirBnB is just a license to occupy and does not create any legal or equitable interest in the property? Is it possible that short term letting is neither a lease nor a type of 'other dealing' and falls outside the scope of s 139 (2)?

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14/07/2017 - 10:15 am
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Hi Jane

Short-term tourist/visitor letting agreements are definitely not residential tenancy agreements.  One NCAT adjudicator, D Charles, remarked in giving Orders that the NSW Legislation is "crystal clear":

"The Tribunal notes that as between the respondent and those occupying his premises under short term tourist or visitor accommodation agreements the Residential Tenancies Act 2010 (RTA) does not apply:  see, particularly, section 7 and section 8(h) of the RTA."

Section 7 - click here

Section 8 - click here

Thus, if the Development Approval says that all residential lots must be occupied by an owner/occupier or someone holding a residential tenancy agreement, short term lets would be - in the City of Sydney's words - an "unlawful use of premises".  There goes the mandatory building insurance should someone be injured or worse, or should a major incident be provoked by someone occupying without a residential tenancy agreement.

Hope this helps

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Lady Penelope
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Millie - The sad thing is that the DA appears to be so prescriptive and restrictive in its wording and its intent ("all residential lots must be occupied by an owner/occupier or someone holding a residential tenancy agreement") that it appears that it would preclude and exclude the owner allowing relatives of the owner from staying in the apartment, or house swaps etc. Unintended consequences perhaps? 

I am not sure whether you have stayed in Airbnbs in cities such as Barcelona that ban Airbnbs  - we have. We stayed in a popular Barcelona Airbnb one month ago for one week. We were not even aware at the time that Airbnbs were banned. All that was required when we arrived was that we signed a Residential Tenancy form with the dates of the holiday being the last week of the Tenancy. We vacated after our week's holiday at the end of the Tenancy. 

The DA that you mentioned can possibly also be circumvented in the same way. 

Although Barcelona City Council has employed over 40 inspectors to crack down on short term holiday lets these measures have so far been largely ineffectual. 

https://www.spanishpropertyinsight.com/2016/07/07/barcelona-threatens-airbnb-others-fines-e600000/

If the concept of inspectors is not successful then another alternative is for the Councils to licence the holiday lets and make their locations transparent. A licence fee could be paid by the owner, addresses given, and owner's contact details recorded.

The fee could be used by the Council's to employ 'bouncers' who would work at night. They would have the authority to issue on the spot evictions for breaches of Council noise and nuisance codes in these properties. Records could be kept of the properties that become 'problem' properties and the owner of these properties could have their licences revoked.

In a Hotel it is the Manager who can evict an unruly guest. The Council's 'bouncer' could be given the same authority as a Hotel Manager. This would avoid the need for police to become involved in noise and nuisance issues.

If you cannot exclude it then at least you can control it. Perhaps this idea is worth some thought? 

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Millie
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14/07/2017 - 3:39 pm
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Dear Penelope

Do you not see the difference between a relative staying over and an Airbnb; having advertised a residential home for short-term let to tourists/visitors on a booking platform, from night one, this is a commercial use of a residential home - yes? 

No, I have never stayed in an Airbnb and I do all within my power to avoid such circumstances.  I respect the rights of residents to housing and the rights of neighbours to their neighbourhood and communities.

If you had watched the media stream, including Jimmy Thomson's writings, and the Neighbours Not Strangers Facebook page/Media Releases, you would have been aware of the situation in Barcelona and practically every other city and major regional centre around the globe. Almost universally officials are endeavouring to protect the rights of citizens and neighbourhoods and communities.  

"Australia is our most penetrated market", Airbnb's Sam McDonagh.  Sydney ranks 4th in the world in terms of Airbnb listings.  There is an unknown number of platforms/clones penetrating our residential housing.

Please speak with those who have been forced to live with neighbouring properties let short-term.  The NSW Land and Environment Court discribes such a 'mixed use' as "fundamentally incompatible"; neighbours refer to it as "a living hell".

There are residents all across NSW who are calling for the residential zoning on our buildings and suburbs to be upheld and respected, with local Councils mandated to enforce Planning and Zoning legislation.  There should be no retrospective changes to the status of our homes - owners have undertaken all due dillegence when purchasing into residential strata and residential suburbs.

So back to our legislation - NSW probably has world's best legislation and case law.  Our Legislators should be forced to legislate.

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Lady Penelope
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Hi Millie - I realise that you are passionate about this topic and I respect your zeal and determination.

Can I address your point that short term letting is a "commercial use of a residential home" with the following answer?

Every type of residential lease has a commercial aspect - be it a 3 month lease, or a 2 year lease. The mere fact that rent is paid does not change the classification from a residential to a commercial building. If this were so then almost every strata building in NSW would be a commercial building as almost all would contain tenants of some sort or another. A 1 month rental period is no less commercial in nature than a 3 month rental period, or a 2 year rental period. 

Is a person (or a family) who is renting a property for 1 month, or 2 months and 29 days  a less desirable person (or family) than one who rents that same property for 3 months or longer? I hope your answer would be 'no'.

Isn't it therefore the actual conduct of the person who is renting the property that creates the problem - not the tenure or the duration of the stay? 

There are already conduct obligations in by-laws and the Act. The conduct obligations and enforcement process applies to everyone; owner occupiers, short term and long term tenants. 

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Thank you Millie, I am aware that short term letting is not a residential lease under the NSW RTA. Thankfully, the NSW legislation is clear on this point.

The real point I was trying to make is a more technical one but, in my view, an important one that goes to the character of the short term letting agreement, and the scope of subsection 139 (2).

It is arguable (is it not) that a short term letting agreement is simply a licence to occupy . It is a contract for an accommodation service, but is at the will of the property owner. The consumer can be asked to leave at any time or the booking cancelled with nothing more than some low level consumer protection.

As such a licence to occupy is not a 'dealing' in property because it does not create any legal or equitable interest in the property.

If this is correct, and a license to occupy is not a dealing in property, subsection 139(2) has no application to short term letting and does not prevent an OC from passing a by law that explicitly addresses this topic.

The only question is whether a by law is consistent with the zoning law. Thus for example, in North Sydney, the LEP does not permit this type of short term letting in residential areas. We are opposed to it on our estate, but are concerned that we will suffer retrospective lose of our rights to residential amenity under the existing LEP - not to mention the myriad issues associated with shared car parks, shared recreation facilities, etc. etc. etc.

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Lady Penelope
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Jane - Planning rules and permissions are issues for the respective local authorities as you correctly point out. Approvals usually don’t restrict short term use, but that can vary from building to building. Short term tenure is generally still classified as meeting the requirements for  'residential' use unless expressly stated otherwise. 

Even if your building had strict planning rules your OC cannot enforce the council’s requirements. This is outside of your OC's authority. The only thing that your OC can do is to complain to council about the lack of compliance with the planning approval. It is then up to the council to take this matter further. 

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Lady Penelope said
Approvals usually don’t restrict short term use, but that can vary from building to building. 

It sure can.  Around here, City of Sydney is very specific in not only saying that buildings are residential only but in defining what that means (three months or more).

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Lady Penelope
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14/07/2017 - 7:29 pm
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You are absolutely correct JT. But for how long will the status quo remain ... that's the big question. City of Sydney Council appears pretty keen to change the status quo, not only for itself but for the whole of NSW. From their site: 

"Under current planning controls tourist and visitor accommodation is not allowed in residential zones and residential and tourist accommodation in the same building must be on separate floors accessed by separate lifts.

We are recommending a new definition for short-term rentals and a consistent approach across NSW – premises could be classified as ‘exempt’ development where they meet certain requirements, such as limiting the number of days they can be let in a year and the number of people staying. If short-term letting does not meet the requirements it would not be permitted."

If the City of Sydney has this attitude towards the existing planning laws would they then be prepared to vigorously prosecute those who do not comply, or would they  instead 'slow walk' these cases until they get the result that they want?

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Lady Penelope said
City of Sydney Council appears pretty keen to change the status quo, not only for itself but for the whole of NSW.

City of Sydney have been very disappointing in their attitude to short-term lets in apartments - especially since they have more apartment blocks than any other council in Australia. I characterised their submission to the Coure inquiry (which said pretty much what you have here) as a betrayal of apartment residents.

However, their media person said this in a recent email to me on their official position on short-term letting: "The City believes that owners’ corporations should have improved powers to manage the impacts of short-term letting."

Does that mean additional fines after the event? Or the ability to reject short-stay letting?  If it's the latter, the prospects may not be as bleak as we fear.

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Millie
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15/07/2017 - 12:30 am
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The latest from the City of Sydney, in connection with residential lots in a building where they previously obtained LEC Oders banning short-term rentals.  This email received four days ago:

"The matters raised in your emails to Council (Dated May and June 2017) and the supporting internet links and supporting documentation have been examined.

It is noted that you allege that the units detailed in the email are being used to provide short term residential/tourist style accommodation (A potential breach of the extant development consent).

The use of these units for short term residential/tourist style accommodation has been considered in terms of its impact on the manit of the building and the safety of its occupants to determine if it is within the public interest for Council to proceed with formal enforcement action against those facilitating the use of the units.

In this case, Council has elected not to enter into enforcement action given that there is no significant detrimental effect on te environment and it does not constitute a risk to public health and safety.

It is recommended that you raise (or reiterate) your concerns with the Strata Committee who can investigate and take action accordingly..."

Yet it seems that the strata committee can't take action and, certainly in our case, won't take action as those who control our residential building are long, long term advocates of short term rentals.

Perhaps the NSW Government should consider what type of living environment those in strata must cope with - now, and in the future.

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Cathy Sherry
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Jane said
This is an excellent discussion but could one or more of the legal teams please express their view on whether a short term let via a platform like AirBnB is just a license to occupy and does not create any legal or equitable interest in the property? Is it possible that short term letting is neither a lease nor a type of 'other dealing' and falls outside the scope of s 139 (2)?  

That is a really interesting question Jane. The answer to whether something is a lease or a licence is not in legislation but in the common law. It depends on whether someone has been granted 'exclusive possession' of the property: Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209 . Exclusive possession is the right to exclude everyone, including the owner (as tenants can - their landlord can only come into the premises with their permission or in accordance with a provision in the lease).

Typically, if you just let a room in your apartment on Airbnb, that would not be exclusive possession and as a result it would be a licence, not a lease. But if you let the entire apartment, it is most likely granting exclusive possession and is thus a lease. That is what Justice Croft found in Swan v Uecker [2016] VSC 313 But it always depends on the agreement in question. 

This creates a strange loophole. The strata legislation has never banned by-laws that prohibit or restrict licencing, probably because no one ever thought of it. It probably never occurred to anyone that an OC would try to prevent people from giving others (like family members) permission to stay in their apartment. But it does create a peculiar loophole in the law. There is no provision that prohibits OCs from writing by-laws banning licencing. However, I don't think this provides any great assistance because a) most Airbnb arrangements are probably leases and b) even though the SSMA does not ban by-laws that prohibit licencing, I think that if a court were asked to consider the question, it would say that the ability to give others permission to be on your property is an ordinary part of owning property and cannot be infringed by an OC.

Cathy Sherry

Senior Lecturer

Faculty of Law

UNSW

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