Short-Term Holiday Letting In Strata


Short term leasing of residential apartments is an exceptionally controversial topic within strata communities.

Lord Mayor of Sydney Clover Moore acknowledged that “…short term rentals in strata schemes can adversely affect residential amenity and owners’ costs.” She highlighted the most prevalent issues as noise from ever changing residents who are always on holiday, damage to common property from frequent movement of luggage, overcrowding and increased use of common facilities and concerns about neighbourhood security.

Many newer strata developments have caveats placed on their buildings to limit the number of people allowed per bedroom and prohibit short-term rentals; however there is currently no effective method of enforcement that has proven successful.

Lot owners argue that holiday makers have no knowledge or interest in by-laws and are carless when it comes to damage or following rules and say that most public nuisance and offensive noise incidents are caused by short term renters.

Although countless owners share these views, there are many who see the benefits in short term letting. A respondent to the NSW Strata Laws Online Forum believes that lot owners should be allowed to use their lots as they see fit, provided they don’t cause disturbance to other lot owners and with the approval of the Owners Corporation.

If you are having any issues with a neighbour regarding short term letting your best course of action is to get hold of your local council’s Local Environment Plan (LEP) to see what zone designation you are in. If you are zoned as ‘residential only’, then all short-term letting is strictly prohibited. A by-law may also be introduced at an AGM in order to protect residents and show future buyers the status of the strata scheme.

Here is an example of such a by-law:

“Pursuant to the provisions and regulations contained in XYZ Council’s Local Environment Plan 2012, lot owners are prohibited from engaging in short term accommodation (including, but not limited to operating as a serviced apartment or holiday unit), with such activities being specifically prohibited by council regulation within XYZ zone.”



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Recent Comments

2 Comments

Robert Rosen On July 20, 2012 | Reply

Your claim that “If you are zoned as ‘residential only’, then all short-term letting is strictly prohibited” is a rather simplistic view of the legality of short term letting in residential zones. Residential zones in LEP’s in NSW are usually not strictly confined to residential only activities and the legality of short term letting needs to be judged on a case by case basis and depends on the wording of the particular Council’s LEP. Your views is also not shared for example by The Department of Planning and Infrastructure, Destination NSW, The Office of FairTrading, the Department of Local Government or the Real Estate Institute of NSW. Thus for example here dare a few quotes from a Deputy Director of the Department of Planning to one NSW Council “The policy approach in this regard is that such provision of holiday accommodation in a dwelling is a use ancillary to the major purpose of the building”…and again ” While no final decision has been made I expect the conclusion will be that it is not appropriate to control holiday tenancies through the planning system.” and “council is encouraged to continue the current model of self regulation/management (of holiday accommodation) through the letting agents and landholders as a means of minimising any impacts.

Chelsey On July 20, 2012 | Reply

Thanks for your input Robert.

In this case, I have presented a very simplistic view of short term holiday letting in strata as it is a complex issue. The purpose was to make comment on the issues raised out of the NSW Strata Laws Online Forum, and present a brief explanation on courses of action available.

Thank you for adding some depth to the discussion, i’m sure others will benefit from your knowledge.

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