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Short-term letting restrictions – PART 2

Short-term letting restrictions and how they impact you

We have previously written an article about the short term letting issues affecting property and strata participants back on 6 March 2021 (You can read it here). In short, it dealt with Part 1 of the legislative framework to regulate the short term letting situation. It involves the NSW Fair Trading’s mandatory code of conduct (which regulates the conduct of short term letting, presuming it is permissible) and the Strata Legislation (which allows the strata schemes to ban short term letting in lots that are not a principal place of residence of the owner or occupier).

As you may recall, the last part of the legislative framework was due to be finalised in mid 2021 by Parliament (which deals with the permissibility issues). And now we are in mid 2021 and the framework is now finalised!
For strata participants, the strata schemes retain the ability to ban short term letting for unhosted premises (in the sense as mentioned). Likewise, they can pass a by-law in the same way to permit short term letting. (And we can of course set additional conditions to these by-laws in either case to amplify the ban or approval).
The new planning law framework was due to commence on 30 July 2021 but it is now further deferred to 1 November 2021, to allow more time for the industry to adjust. Essentially, short term letting is permissible across all land zones subject to various conditions. In brief, they involve the following, for planning law purposes:

  1. New definition of “short-term rental accommodation” (or STRA) – This is defined to mean “a dwelling used by the host to provide accommodation in the dwelling on a commercial basis for a temporary or short-term period.”. This is more generic than the definition under the mandatory code of conduct;
  2. New definition of “Hosted STRA” – This basically means, the host resides on the premises during the accommodation;
  3. New definition of “unhosted STRA” – This basically means, the host does not resides on the premises during the accommodation;
  4. There is an exempt development approval pathway for Hosted STRA – For Hosted STRA, the exemption can last all year round (no limitation to days);
  5. There is an exempt development approval pathway for Unhosted STRA – For unhosted STRA, the exemption can last up to:
    (a) 180 days in a year for the following locations – the Greater Sydney Region (which of course includes many metropolitan Sydney suburbs), the Ballina area, the Bega Valley area, the City of Newcastle area, the Dubbo Regional area, certain land in the Clarence Valley area, and certain land in the Muswellbrook area;
    (b) 365 days in a year (ie. no limitation to days) – for other locations in the State.
  6. General conditions – Both Hosted and Unhosted STRA need to follow various requirements, eg, fire safety standards and new STRA Register (yes, that’s additional to the Fair Trading’s code of conduct register) which regulate the fire safety and limitation of days issues. Also, some specific local government areas have specific requirements (although does not appear to be extensive – for instance, Byron LGAs have a deferred commencement to 31 January 2022).

So, if you wish to ban, restrict, regulate or undertake short term letting and require further assistance, we are more than happy to help!

More Information

Please contact our Property/Strata law team at Matthews Folbigg Lawyers on 9635 7966 if you would like advice or assistance.

DISCLAIMER: This article is provided to readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as a definitive or complete statement of the relevant law. Liability limited by a scheme approved under Professional Standards Legislation.