D-Day looms for Airbnb apartment ban by-laws

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D-Day for apartment blocks in holiday areas of NSW is just around the corner – where D stands for “Dump short-term letting”.

On April 10, the new NSW strata regulations allowing apartment blocks to pass by-laws banning short-term holiday lets of entire homes come into force.

And the word is that not only should you get your by-laws in place as soon as possible, if you don’t already have one, there has been no better time to adopt one.

The short-term letting industry is in retreat due to visitor numbers falling off a cliff.  They are even issuing demands for government hand-outs.

Many Airbnb and Stayz hosts are putting their holiday properties back on the residential market – especially if they are sub-letting from owners, rather than owning the property themselves.

And, tactically, the prospects of 25 percent of owners turning up to block your new by-laws are seriously diminished if you have to hold a meeting by proxy or electronically, rather than in person.

“The amendments to the Strata Schemes Management Act 2015 (NSW) will commence on April 10, 2020,” says the Owners Corporation Network (OCN) in a mail-out to its members. “New section 137A clarifies that an owners corporation can adopt a by-law to prohibit short-term rentals where the lot is not the principal place of residence of the host.

“If you have not yet passed the by-law you should do so as soon as possible,” says the OCN which is offering a lawyer-written, pro-forma by-law to members for $200 plus GST.

But what are the chances of getting it through a general meeting? Well, if you call an Extraordinary General Meeting, and make it proxies and electronic engagement only, due to the social distancing requirements, it will cost very little.

And it could have maximum effect while the people most likely to object – and it only takes 25 percent of those voting to block the by-law – are distracted by trying to rescue what was once a cash-cow but is now a financial albatross around their neck.

“The word on the street is that short-term letting agents have switched their properties to long term leases,” says property lawyer Tony Cordato in a comment in the Flat Chat Forum.

“This is supported by the fact that if you look at the ‘for rent’ properties in short-term letting hot spots, you will see a sharp rise in properties for rent in a time of year when properties available for rent are dropping. Watch this space.”

There is no doubt that the short-term letting industry is suffering. This week the Chairman of Australian Short Term Accommodation, Robert Jeffress, issued an “urgent appeal” on behalf of Short Term Rental Accommodation (STRA) owners to be considered in Government discussions about rental properties, tenants and landlords.

“While governments are actively reviewing specific relief packages to assist tenants struggling to pay rent, and looking into solutions for landlords who may not meet mortgage requirements, there have been no talks on assistance for owners of STRA properties, who have been forced to allow booking cancellations, and to comply with the ever increasing ‘non-essential travel’ edict,” Mr Jeffress said.

“Like other landlords, STRA members rely on their rental income to stay afloat. However, unlike other landlords, STRA owners do not have the benefit of delayed rent – they will be receiving no rent” he added. “The Covid-19 emergency will force many more owners to lose their businesses and homes.

“The short term rental accommodation (STRA) industry is in devastation,” Mr Jeffress said, adding that “everyday Australians rely solely on this rental income to stay afloat and, for many, that rental revenue is a primary source of their income.”

Here at Flat Chat, we sympathise with house owners who were sucked in by promises of life-changing amounts of money from so-called sharing.  But for those who chose to ignore their planning laws, by-laws and neighbours’ wishes, our view is, you made your beds – tough luck if you can’t find anyone to lie in them.

Jane Hearn, Deputy Chair of the OCN, also sees a major flaw in the pleas for financial help: “This is not the hotel or serviced apartment industry. Airbnb is still listing illegal apartments, in direct violation of development consent conditions and by laws.”

Let’s hope that if the government should offer any help, it restricts aid to only those short-term letting hosts who can prove their properties comply with local zoning and strata scheme by-laws.

After all, we can’t have the government propping up illegal activities, can we.

 

 

 

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