Following the extended discussions on the validity of by-laws that set out to restrict short-stay letting by invoking the residential-only status of some apartment buildings, we contacted fair Trading to see if they stood by their comments last week.
They do. This is what a spokesperson for Innovation and Better Regulation Minister Matt Kean wrote in reply:
The Strata Schemes Management Act 2015 (s139 (2)) states that a by-law cannot operate to prohibit or restrict a transfer, lease, mortgage or other dealing with a lot.
Further, S136 (2) provides that any by-law that is inconsistent with the Act or any other law has no effect. If a Local Environment Plan (LEP) allows STHL, a by-law seeking to prohibit STHL has no effect and cannot be enforced.
The model by-laws under the current Act include by-law 18 (1) which states the owner or occupier of a lot must ensure that the lot is not used for any purpose that is prohibited by law.
With the introduction by some councils of LEPs that refer to STHL, and in some cases require development consent for that activity, a number of questions arise as to the interaction between LEPs and strata laws.
Model by-law 18(1) will only apply if the owners corporation has adopted the model by-laws or have the same provision in their own by-laws. Note: schemes are required to consider whether or not to adopt the model by-laws at the next AGM following the introduction of the new laws. This could take up to the end of November 2017 for all schemes to decide.
By-laws are subject to the Act and cannot operate to prohibit a lease or other dealing with a lot. Model by-law 18 therefore cannot operate to prohibit the lease of a lot.
If a LEP requires development consent for STHL, ensuring compliance with the LEP is a matter for the relevant council.
You can read here what six experts on strata law said earlier this week.