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Psst! Don’t tell anybody but, you know those new laws about short-term holiday letting that everybody got their knickers in a twist about?
Well, the rumour is that they’re not likely to be in place and ready to beat people over the head with until this time next year, at the earliest.
Seriously. After all the angst and anger of the past couple of years, the state government’s Airbnb rules aren’t likely to become law until after the next state election.
Why? The official reason – not that anyone is openly admitting this – is that the details of the code of conduct have not been worked out yet.
But the whispers I hear are that nobody in Government wants to go to the next state election with the spectre of a highly organised Airbnb campaign hanging over them – and that includes Labor as well as the Coalition.
Q: So where does that leave us? A: Exactly where we were before.
And where exactly was that? Good question.
Despite the advice freely given by Fair Trading that you can’t have by-laws that ban short-term letting, most lawyers I talk to say you most probably can, citing last year’s verdict in WA Appeals Court as well as the Turks and Caicos decision of the Five Law Lords of the Privy Council in London.
Just as an aside, I’d love to know when and why Fair Trading suddenly stopped being so free and easy with its dubious opinions. Last week I asked them if the decision on Baxter the dog, overturning a no-pets by-law, was a precedent for cases at NCAT. I was told “we don’t comment on NCAT decisions.”
That’s funny. Just a few months ago they were quoting a minor decision at NCAT, over-turning a by-law banning Airbnb, as if it was Holy writ, carved on stone and written into the constitution. Go figure.
Where was I? Oh yes, where are we on short-term letting?
Here’s what I think, we have at least another six months of faffing around waiting for the government to do something (when they clearly don’t really want to do anything) and we have to live with the consequences.
So who do we believe – Fair Trading or most strata lawyers? Here is my theory, based on no legal training or strata management qualifications, but drawn from talking to people who are a lot smarter than I am.
The WA and Privy Council decisions exposed a flaw in the pro-STHL lobby’s (and Fair Trading’s) dependence on the bit of strata law (Section 139.2) that says you can’t pass a by-law that prohibits or restricts an owner from leasing, mortgaging or “dealing” with their property.
Let’s have a look at it
Section 139: Restrictions on By-Laws
(2) By-law cannot prevent dealing relating to lot
No by-law is capable of operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot.
That would seem to kybosh any anti-STHL by-laws. However, in not so many words, various eminent legal minds said that if you live in a block zoned residential then any “right” to rent out your apartment as a holiday let did not exist to begin with.
Therefore no one would be restricting anything if they passed a by-law saying said you couldn’t do it. You can’t restrict a right that doesn’t exist, if your residential zoning prohibits it.
Also, bear in mind that owners corporations can’t pass by-laws that would contravene superior laws. So you probably shouldn’t pass a by-law saying that you can have short-term letting under certain restrictions in a block zoned residential because a superior law – planning – says you can’t have it at all.
OK, a colleague asked the other day, what would an acceptable by-law look like?
Here’s what I think. First it has to be simple, secondly your building has to be zoned residential only. Also, preferably, your local council defines what it means by residential – City of Sydney and Randwick councils, for instance, sets the bar at a minimum of three months.
If all those boxes are ticked, I reckon a reasonable by-law would be something like:
Observance of residential zoning
This building is zoned “residential only”, under the terms of its Development Approval. The issuing authority, Dardanelle City Council, defines “residential” as a let for no less than three months. Therefore this by-law forbids all lets of entire apartments for less than that period. There can be no exceptions as we are bound by superior law.
What do you think? Too wordy? Feel free to jump in and tear it apart … but only if you make it better.
But if you are thinking of adopting it for your block, you might want to run it past a proper strata lawyer first.
By the way, if your block allows STHLs under certain conditions, you could have a look at your DA and see if your by-law would stand up to a challenge.
Further to the timing of the new laws, I had this response for the Department of Finance, when I asked what the time frame was likely to be.
“The new regulatory framework, including the Code of Conduct and the new Short Term Rental Agreement (STRA) planning instrument, should be finalised by early 2019,” as spokesperson told me. “A period of consultation with industry and stakeholders will follow before the Code is administered.”
So definitely not this year and probably not before the election.
Jimmy, don’t hang your hat upon the the fact that the Development Approval that issued when the building stated that the approval was for the building of residential home units. Town Planning zones change over time, usually from low density to medium density to high density. It is the current zoning that is relevant.
Having said that, a residential zoning will be no protection against the new short-term rental accommodation policy because the government is proposing a ‘Short-term Rental Accommodation Planning Framework’ under which it will implement a state-wide planning framework which will introduce in all residential zones the ability to use a property for short-term rental accommodation without Council consent (called an exempt development) provided the property meets minimum fire safety and evacuation requirements.
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