NSW short-term rentals set to be hit with new regulations

NSW short-term rentals set to be hit with new regulations
NSW short-term rentals set to be hit with new regulations

Regulation is coming for the short-term rental accommodation (STRA) industry in NSW, but not before further discussion on how it should work for residential dwellings.

The advent of online accommodation booking platforms has seen the national industry estimated to be worth $31 billion nationally in 2016, with NSW’s share about half of that figure, with short term rentals benefiting the economy and providing income for property owners.

But the shift away from hotels, motels and the traditional bed and breakfast establishments has caused problems for communities. 

At present, STRA is regulated differently in different local government areas across NSW, undermining certainty for hosts and communities.

The new schemes is a long time coming, following a parliamentary inquiry in 2015-16 and an options paper in 2017. 

In June 2018, the NSW Government announced a state-wide planning code permitting the use of dwellings under certain conditions, including limits on the days the rental can take place.

The NSW Parliament passed the Fair Trading Amendment (Short-term Rental Accommodation) Act 2018 in August 2018.

There will be a mandatory code of conduct that will apply to online booking platforms, letting agents, hosts and guests.

It was proposed that strata schemes can adopt a by-law that prohibits STRA where the property is not a host’s principal place of residence. 

Any such by-law will need to be adopted by special resolution, with 75% of votes supporting the proposal at a general meeting.

There will be ‘exempt’ and ‘complying’ approval pathways that enable a limit on the number of days possible depending whether the host is present and where the host is not present.

The policy seeks state-wide consistency in the definition and permissibility of STRA, although it will allow regional councils to nominate different day limits for un-hosted rentals,

These council include locations with many coastal location such as in Clarence Valley Shire around Angorie, Yamba and Iluka. Ditto Muswellbrook Shire around Denman and Sandy Hollow. There's also special rules around Lake Macquarie and Ballina Shire.

The presiding departments, the Department of Planning, Industry and Environment (DPIE) and Department of Customer Service (DCS)  are now seeking further feedback from the NSW public on the government's proposal.

There are going to be rules that ban hosts and guests in certain circumstances mostly regarding anti-social behaviour. The decision will come from the commissioner who will maintain a registry publicly available on the internet.

The rules require booking platforms and letting agents to keep the full particulars of each accommodation arrangement for five years.

Feedback is sought on matters including the process for registering a property; the information required to be included on the register; who gets access to information on the register and the costs associated with establishing and managing the register.

Given the time that industry may need to develop and establish the register, the regulatory framework won't commence until 2020, although there is some prospect of a staged implementation towards the end of 2019.

The closing date for submissions is September 11. Making a submission at www.planningportal.nsw.gov.au/exhibition/have-your-say-short-term-rental-accommodation-reforms or mail to: Director, Housing Policy NSW Department of Planning, Industry and Environment GPO Box 39, Sydney NSW 2001.

Meanwhile the government has convened an advisory committee which includes stakeholders including Airbnb; Home Away/Stayz; Property Owners Association New South Wales, Destination New South Wales and the Tenants’ Union of New South Wales.

This article first appeared in The Daily Telegraph. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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