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.