Strata management legislation and the increasing popularity of Airbnb

November 17, 2016

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There has been a proliferation of short term lettings through operations like Airbnb.  A relevant issue is whether a Strata Scheme can pass a by-law to prevent short term lettings of lots. 
 
The new Strata Schemes Management Act prohibits a by-law which prevents dealing with a lot unless the by-law allows that dealing. 
 
Following a Government enquiry into the adequacy of the regulations of short term holiday lettings in New South Wales, the NSW Government issued a report finding that that Strata Schemes cannot pass a by-law which prevents short term lettings.   The ramification of this report is that short term lettings are permitted and cannot be prevented by Strata Schemes. 
 
The Government came to this conclusion by relying on Section 49(1) of the Strata Schemes Management Act which states that no by-law is capable of operating to prohibit or restrict dealing with a lot.  Whether you are able to have a short term letting remains controversial because some have interpreted the legislation to only refer to dealings which can be registered at the Land Titles Office. They argue that it is not a general prohibition.
 
The important fact is that the relevant zoning will prevail over any by-law passed by a Strata Scheme.

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