Short-term letting: What can your Committee do?

As I always tell my children, we’re here for a good time, not a long time.

A tenuous link I know, to an article about short term letting.

Under the current Queensland law, a body corporate has no power to prevent lot owners from letting their units to short-term occupiers. But that doesn’t mean a body corporate is powerless against short-term letting.

In this article, we discuss how valid by-laws can mitigate against issues often associated with short-term rentals, including noise, parking, overcrowding, and overuse of common facilities.

      Snapshot

  • Accommodation sharing websites such as Airbnb, Stayz and Flipkey help lot owners to let out their units to short-term occupiers.
  • Under current Queensland law, short-term letting is prohibited in body corporate schemes only where such use is contrary to the local planning scheme.
  • We recommend committees review their scheme’s by-laws to ensure they contain appropriate provisions for managing the problems commonly associated with short-term letting, such as noise, illegal parking, overcrowding and overuse of shared facilities.
  • By-laws should also include a requirement that lots be used only for purposes that comply with the local authority’s planning scheme. 

Why can’t a body corporate outlaw short-term letting?

The Body Corporate and Community Management Act 1997 (“BCCM Act”) provides that, where a lot can lawfully be used for residential purposes (including under the local planning scheme), a by-law cannot restrict the “type” of residential use: s 180(3). This includes short-term letting.

Additionally, there is no requirement for a lot owner to obtain the body corporate’s consent before letting out their lot (or part of it) on a short-term basis.

What by-laws are permitted? 

The BCCM Act provides that a by-law can provide for the administration, management and control of common property and body corporate assets and the regulation of, including conditions applying to, the use and enjoyment of lots, common property and body corporate assets, services and amenities (s 169).

Therefore, by-laws can validly relate to regulating behaviour, keeping of pets, noise and other disturbances, parking, security and the use of common facilities (but not private lots).

What by-laws are invalid? 

The BCCM Act prevents by-laws which:

  • discriminate against types of occupiers, e.g. short-term versus long-term tenants (s 180(5));
  • save for under an exclusive-use by-law, impose a monetary liability on an owner or occupier of a lot (s 180(6)). This includes imposing a different fee structure on owners who let out their properties on short-term basis, such as requiring them to pay a higher or additional expenses for common property maintenance, imposing a bond on such owners, or levying fines against misbehaving renters; or
  • are otherwise oppressive or unreasonable, having regard to the interests of all lot owners and occupiers (s 180(7)).

By-laws which outright prohibit something will generally be held to be invalid on the basis that prohibition is not “regulation”.

In late July 2016, a Victorian judge ruled that (under the Victorian strata legislation) an owners’ corporation has no power to makes rules prohibiting lot owners from using their apartments for short-term letting.

So what can my committee do? 

There are 2 main things we recommend committees do, to ensure their scheme’s by-laws can assist (to the extent possible) in managing short-term letting. These are:

  1. Review the by-laws to ensure they contain appropriate provisions for regulating the problems commonly associated with short-term letting, such as noise, illegal parking, overcrowding and overuse of shared facilities.
  2. Ensure the by-laws provide that lots must only be used for purposes which comply with the local authority’s Planning Scheme.

We can assist your committee to conduct these reviews and prepare appropriate amendments that strengthen your scheme’s by-laws.

Is the BCCM Act likely to change to help bodies corporate? 

The issues of disruption and possible loss of amenity caused by short-term letting have not gone unnoticed by policy-makers across Australia:

  • Queensland University of Technology (QUT) is undertaking a review of property laws on behalf of the Queensland Government, which includes examining issues arising from applying the BCCM Act provisions to short-term letting. In 2014 QUT published an Options Paper which considered issues of by-law enforcement, specifically in relation to overcrowding of schemes, and whether bodies corporate should have an ability to delegate (to a body corporate manager or agent) the power to issue contravention notices and/or a power to assess monetary fines against owners or occupiers who disregard contravention notices.
  • The Grattan Institute published a review in which it recommends that States, “should give owners’ corporations more power to limit disruptions caused by short-stay letting and streamline dispute resolution.” This could include powers to limit or possibly ban short-stay rentals if agreed to by lot owners.
  • The New South Wales government is conducting an inquiry into the adequacy of short-term letting regulations, including differences between NSW and other jurisdictions, and between traditional accommodation providers and online platforms such as Airbnb, and regulatory issues such as customer safety, land use planning and neighbourhood amenity, licensing and taxation.
  • The South Australian government recently clarified its planning rules to make clear there is no cap on the number of days or nights for home sharing or short-term letting that would require an owner to seek a development approval.
  • In contrast, the Tasmanian government has proposed to changes the state’s planning legislation to require home owners to obtain a permit before letting out their homes (or rooms) for more than 42 nights per year. 

In the light of the above reviews and papers, the Queensland Government could in future propose to make legislative changes to give bodies corporate additional powers for controlling or prohibiting short-term letting situations. However, it is unlikely such changes (if any) would be presented in the immediate future.

Does any other legislation come into play? 

Other Queensland laws (including the Sustainable Planning Act 2009Residential Tenancies and Rooming Accommodation Act 2008Residential Services (Accreditation) Act and Work Health and Safety Act 2009 include provisions relating to short-term letting. But none of these offers tools to assist the body corporate (itself) to regulate against short-term letting.

As always, if you have any questions feel free to contact me or my associate Steven Hunwicks.

Regards,

Mark Mellick, Legal Practitioner Director; and

Steven Hunwicks, Associate