What are the issues?
Global company Airbnb has spearheaded the emergence of what is now known as the ‘Sharing Economy’- a phenomenon which has glided swiftly past the cumbersome clutches of legal regulation around the world. In Sydney, Airbnb has exploded onto the holiday accommodation scene, making it their 5th largest market worldwide – larger even than its birthplace of San Francisco. However, the proliferation of short-term holiday letting in Sydney has raised questions as to who reaps the benefits of its success and who suffers the consequences of its unregulated expansion.
Community members and ratepayers are now contending with the regular coming and going of tourists whose priorities lie mainly with leisure and festivity, who may not be familiar with local rules and who have no real stake in maintaining good neighbourly relations. This has stirred resentment in areas occupied by locals who have been living in what were considered primarily residential areas with no significant tourist attractions or hotels nearby. The flexible, micro-scale business platform provided by Airbnb allows people to create spaces for short term rental where they were previously unavailable, unwittingly creating pockets of tourism in previously suburban areas.
What is being done?
Last month, the NSW government took a much-anticipated step in the direction of regulating short term rental accommodation and the holiday letting industry that has been the birthplace of companies like Airbnb and Stayz. The Fair Trading Amendment (Short-term Rental Accommodation) Bill 2018 was drafted in response to strong community discontent expressed through the Options paper on short term holiday letting which focused on issues including noise, waste, parking, security and housing availability. It also produced evidence to suggest that complaints were significantly worse where the owner of the residence was not present.
The new sections; 52A to 54E will account for the previously unregulated three-month period that comes within the scope of short-term rental accommodation arrangements. The new law will only govern commercial arrangements and applies to not only home owners but also strata unit owners. The reforms will introduce a code of conduct for industry participants which will prohibit any anti-social and irresponsible behaviour or behaviour which unreasonably interferes with a neighbours quiet and peaceful enjoyment of their home.
The new provisions will assign a body to administer the code, require registration of the residential premises being used, implement a warning system for contravention of the code, a complaints system, procedures for dispute resolution and an exclusion register for participants who commit two serious breaches of the code within two years – the penalty being a 5-year ban. More serious contraventions of the code will be considered criminal offences punishable by a fine of up to $1.1million for corporations and $220 000 for individuals or NSW Fair Trading may choose to pursue a civil penalty for the breach.
The changes will also empower strata management to introduce ‘No Airbnb’ By-laws which can outlaw the practice of short-term rental accommodation in residences where the home/unit is not the owner’s principal place of residence. The amendment will also introduce a 180-day limit on the amount of time a vacant unit can be rented out.
What can residents do limit the disturbance cause by short term holiday rentals near them?
NSW Fair Trading will develop a short-term letting information kit (what you can and can’t do) for owner’s corporations. Residents can inform their owners corporation if they are unaware of this package and request to have them review it. This will alert the relevant bodies that certain conditions need to be met, such as the 21-day notice requirement before the use of the lot for short term rental commences as well as the lot occupancy limit of two- adults per bedroom. However, this 21-day period applies only to the commencement of short-term rental activity, not to each individual rental.
Ultimately, the new laws will create a framework for greater accountability within the short-term holiday rental industry which has been severely lacking regulation and avenues for complaint. The laws do not provide for many of the issues identified by the inquiry and it is yet to be seen how effective they will be in addressing public discontent. The legislation is up for review in 12 months from its commencement in early 2019.
If you want to know more or have questions regarding how these reforms will affect your residency, give us a call or send us an email – we are more than happy to clarify your queries.