Short-stay ban overturned by NCAT

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Last week, the Supreme Court in Melbourne ruled that owners corporations could not pass by-laws banning short-stay lets, such as through Airbnb, in apartment buildings.

This is a big win for strippers, hookers, travelling footy fans and bucks weekend organisers – and, especially, the leeches who let their residential flats to them.

So, thank goodness we live in a state that puts the needs of the community before the greed of individuals.

Just joking, of course!  Because while we can pass by-laws controlling what people do with their units, the NSW Civil Administration Tribunal (NCAT) can overturn them if just one owner objects.

If you have already read this in print or online, you can access other
comments here on the Forum. And you’ll find the NCAT case study HERE.

OK, that’s the theory but how likely is that to happen?  Well, let’s just whiz over to the NCAT website where you will find, proudly displayed on their case study page, an example of them doing just that.

An owners corp had passed a by-law banning short-term lets, one owner wanted to run them and an NCAT adjudicator decided the by-law was unreasonable and scrubbed it. Welcome to Victoria, Sydneysiders!

So can we pass by-laws banning short-stay lets or not? They say if you ask five lawyers a question you will get six opinions. With strata law you could double that.

Some say yes, but only if your zoning is residential only.  Others say no, but you can put restrictions in place that make short-stay lets impossible.

However, our fundamental problem, according to leading strata lawyer Stephen Goddard, is one clause in strata law that that says by-laws can’t interfere with “dealing” with lot properties, including buying, selling or renting them.

“It’s a fossil that’s been in the strata laws since they were first written more than 50 years ago,” he says. “But it doesn’t belong any more.”

This is the clause quoted in the NCAT decision so our fates are in the hands of NCAT adjudicators, heaven help us.  Do they get special training in strata issues? Do they have a checklist of criteria? A benchmark?

No, no and no. NCAT doesn’t even use its own decisions as precedent, which is probably a good thing, given some of the rulings they have made over the years.

All it takes is one investor and an adjudicator who thinks the ‘rights’ of an individual count for more than the needs of a community, and it’s bye-bye by-law.

There’s a lot more on this here on the Forum.

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