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Short-Term Holiday Letting regulation changes in NSW

The Government finally responds to the AirBNB frenzy

Short-Term Rental Accommodation (STRA) otherwise known as short-term holiday letting has been unregulated in NSW until now!

The evolution of online platforms such as Airbnb and Stayz (Homeaway) have significantly influenced the law on Short-Term Rental Accommodation in Australia. A short-term let is usually a rental period under six months and are most common amongst people travelling or attending short-term business trips. They offer comfort and flexibility for guests who wish to rent a property for shorter periods of time however if not managed correctly, short term lets can cause problems for the community.

In response to concerns of safety, overcrowding, noise pollution and damage to property, especially those managed under a strata scheme, the NSW Government released a regulatory framework which comprised of five draft documents. These documents were open for public feedback until 11 September 2019.

  • State Environmental Planning Policy (Short-term Rental Accommodation) 2019.
  • Environmental Planning and Assessment (Short-term Rental Accommodation) Regulation 2019.
  • Fair Trading Amendment (Code of Conduct for Short-term Rental Accommodation Industry) Regulation 2019.
  • Code of Conduct for the Short-term Rental Accommodation Industry.
  • Short-term Rental Accommodation Fire Safety Standard.

The key proposals of the documents were the introduction of planning laws, a Code of Conduct, the proposal of a property register and fire safety standards.

Planning Laws

Short term lettings may constitute ‘exempt development’ or ‘complying development’ under the new framework.

  • When the host is present on site overnight: STRA can proceed as exempt development for 365 days per year, noting the hosts’ ability to manage behaviour and impacts.
  • When the host is not present and the property is not on ‘bushfire prone land’: The state-wide provisions will stipulate the number of days per calendar year that a property can host STRA as exempt development, as follows:
  • If the property is in Greater Sydney, a property may be used for STRA for no more than 180 days per year.
  • If the property is not in Greater Sydney, a property may be used for STRA up to 365 days per year. However, Councils in these areas will be able to reduce the number of days STRA is permissible to no less than 180 days.
  • When the host is not present and the property is on ‘bushfire prone land’, complying development approval will be required for STRA. This is in recognition that additional safety measures are required to provide for the safety of guests who are unfamiliar with the location.

Code of Conduct

The NSW Government has introduced a mandatory Code of Conduct.

  • set out the rights and obligations of STRA industry participants;
  • provide for resolution of disputes and complaints concerning the conduct of STRA industry participants.
  • the Commissioner for Fair Trading may take disciplinary action for any beach of the Code and are given authority to record a strike to any host who fails to comply with certain regulations;
  • outline the compliance and enforcement approach that applies for contraventions of the Code by STRA industry participants;
  • facilitate the oversight of the STRA industry;

Property Register

Under the new framework, the NSW Government has considered the introduction of a mandatory STRA registration system. The register will allow properties to be individually and uniquely identified and allow local councils to enforce compliance with day thresholds.

Safety Standards

The Short-term Rental Accommodation Fire Safety Standard will provide for visitor safety by regulating all the safety in all residences used for short-term rental accommodation. For example, the standard proposes that entry doors should be openable from inside the dwelling without a key and the installation of a lighting system in hallways that are activated by a smoke alarm system.

On 5 October 2019, the Department of Planning, Industry and Environment published an ‘Explanation of Indented Effect’ paper relating to the STRA planning framework. This paper outlines proposed amendments to the planning laws so that the STRA framework can be put into action.

If you have any questions relating to Short-term Rental Accommodation or any other property law matter, please contact the team here at Kydon Segal Lawyers and we will be happy to be of assistance!