NSW short term rental accommodation changes starting Friday 10 April

Owners Corporations may pass a by-law to limit short term rental accommodation from 10 April 2020

New section 137A of the Strata Schemes Management Act 2015 will commence on Friday, 10 April 2020.

The new section 137A enables an owners corporation to pass a by-law which prohibits a lot being used for the purposes of a short-term rental accommodation arrangement if the lot is not the principal place of residence of the person giving the right to occupy.

A special resolution will be needed to pass this by-law (which requires there be not more than 25% of the value of votes cast against the resolution).

A ‘short term rental accommodation arrangement’ is a commercial arrangement giving a person the right to occupy residential premises for a period of not more than 3 months.

‘Principal place of residence’ has not been defined in the Act which will no doubt give rise to potential disputes and case law in order to define exactly what this means.

A copy the new section 137A is extracted below:

137A   Short-term rental accommodation

(1)  A by-law made by a special resolution of an owners corporation may prohibit a lot being used for the purposes of a short-term rental accommodation arrangement if the lot is not the principal place of residence of the person who, pursuant to the arrangement, is giving another person the right to occupy the lot.

(2)  A by-law has no force or effect to the extent to which it purports to prevent a lot being used for the purposes of a short-term rental accommodation arrangement if the lot is the principal place of residence of the person who, pursuant to the arrangement, is giving another person the right to occupy the lot.

(3)  In this section, short-term rental accommodation arrangement has the same meaning as in section 54A of the Fair Trading Act 1987.

Some of the other changes the NSW Government has flagged have been put on hold for now, including the exempt and complying development pathways for short term rental accommodation and a code of conduct.

Please contact us if you would like any advice on these new provisions or if you would like a by-law and supporting motion to be provided for your scheme.