Court rules that
Airbnb style holiday letting is unlawful in a strata
The "Pinnacle" is an exclusive residential condominium on
Grace Bay Beach in the Turks and Caicos Islands.
The developer aimed to attract buyers looking for an
exclusive place to live, not the holidaymakers along the
beach. So the developer included a strata by-law which
banned owners from renting out their apartment for less than
one (1) month.
This ban was ignored by the owners of apartment 102, who
rented to holidaymakers, usually with one week stays. The
body corporate sued the owners for breaching the strata
by-law. The owners countered by arguing that the strata
by-law was invalid because the Strata Law did not permit any
restriction on a strata owner’s right to rent out their
apartment. The Strata Law is the same in Turks and Caicos as
it is in Australia.
The case was fiercely fought, all the way to Judicial
Committee of the Privy Council in London, which was also
Australia's final court of appeal until 1986.
In the last year or two, the topic of Airbnb style
holiday lettings in strata apartments has been hugely
controversial in Australia. NSW Fair Trading has advised and
the NSW Civil and Administrative Tribunal has ruled that a
strata by-law cannot restrict the rights of an owner to rent
out their apartment in any way.
The Privy Council rejected this strict interpretation. It
ruled on 21 December 2017 that it was possible that the
owner’s rights be restricted, if the restrictions were
reasonable. In this case, the strata by-law was a reasonable
restriction on the right to lease because it was aimed at
preserving the residential use of the building. It was
reasonable to draw the line at 30 days to distinguish a
residential use from a holiday letting use. Therefore the
strata by-law was valid.
The ruling is a game changer. This is the new game plan
(in my view):
- The NSW Fair Trading advisory and the Tribunal
ruling can be ignored as they are both wrong to reject
any restriction on the right to lease.
- If a strata scheme wants to restrict Airbnb style
holiday lettings, it passes a strata by-law with a one
(1) month minimum stay requirement, just like in the
- If an owner is unhappy with the strata by-law
restriction, they can apply to the Local Council or
Planning Authority for an approval or permit to use
their apartment or villa as a serviced apartment or as a
bed and breakfast establishment. If an approval or
permit is granted, it will override the strata by-law.
- If the strata scheme does not pass a strata by-law,
then the owner can continue with their Airbnb style
For a detailed analysis read my case note:
Can a strata by-law restrict Airbnb
style holiday lettings? A new legal decision is a game
Do I need permission to renovate my home unit?
In the DIY TV Shows, the contestants renovate a whole
block of apartments before they are strataed for sale.
Therefore they don’t need to comply with all those annoying
rules and requirements for renovation approval that all
strata owners need to comply with.
What are those rules and requirements? Up until now, in
NSW, all work affecting the fabric of the building, from
major work such as a new bathroom to minor work such as
putting up a shelf in a bathroom, have all required the same
approval, namely a special resolution (a 75% majority) at a
general meeting of the owners corporation.
But from 30 November, 2016, this changes in a number of
ways depending on whether the work is cosmetic work, a minor
renovation or a major work. Specifically –
– Cosmetic work such as putting up a shelf,
hanging pictures, painting and patching, laying carpet,
installing built-in wardrobes and replacing blinds and
curtains (like for like) will not require any approval.
This is a DIY renovators paradise!
– Minor renovations such as renovating a kitchen,
installing a wooden floor, electrical work, installing an
air conditioner will require approval by a simple
majority (a 50% majority) resolution at a general
meeting of the owners corporation. This work is not DIY
territory because the owners corporation can be expected to
require that the work be carried out by licensed tradesmen,
at specified times, and according to approved plans.
– Major work covers all renovations that are not
cosmetic work and minor renovations. Major work is all work
requiring waterproofing and structural work, such as new
bathrooms, laundries, plumbing work, replacement of external
doors and windows, pergolas and awnings. Major work will
require approval by a special resolution (a 75%
majority) at a general meeting of the owners corporation.
This work is for licensed tradesmen with structural
engineer’s certificates and waterproofing certificates.
For more detailed information, click
How the new Strata Laws make renovating easier for strata
How long do you have to make a
building defects claim against the builder of strata
Owners of new strata apartments regularly find defects,
some minor, some major.
The new Strata Schemes laws in NSW will make it
compulsory for a defects survey to be carried out within a
year, and will provide a retention fund of 2% of the
building cost to cover repairs.
But often, it takes several years before major defects come
to light, such as foundation subsidence resulting in walls
cracking, cladding on facades falling off, water penetration
via faulty roofing or waterproofing, flooding, and so forth.
The question is - how long do you have to make a defects
claim against the builder?
The answer is - 6 years after the building work was
finished, not 6 years after the the building defect was
Determining the exact date the building work was finished
can be vital, as a recent case decided in the Supreme Court
of NSW demonstrates. This is a link to my article
Don't wait until it's too late to make
a Strata Scheme building defects claim
Strata Title ownership is
changing next year. Are you ready?
New Strata Laws will come into effect in NSW on July 2016.
This article explains the major changes that will apply from
How to make settling your home unit
Buying a home unit is very exciting and very stressful at
the same time.
This article suggests 6 jobs that you can be doing to
de-stress the process and make settlement smoother.
The 4 significant changes you need to
Do you own a strata apartment in New South Wales? Are you
purchasing off-the-plan? Strata title law is changing -to
commence on 1 July 2016.
Why landlords and tenants face special
risks when leasing strata shops, offices and industrial
This article covers four commercial leasing issues for
strata shops, offices and industrial premises-
Building repairs; Tenant signage and fit-out; Strata Levies; Tenant use and trading
Is Defect Free Construction achievable
for strata title buildings in NSW?
NSW Fair Trading says that waterproofing, fire safety and
structural defects are the ‘holy trinity’ of building
complaints it receives from apartment owners, in new
multi-storey apartment buildings. There are six reforms for
building defects contained in the new strata law.
Advice for landlords for renting
strata apartments / home units
For landlords, renting out a strata unit is entirely
different from renting out a house because a strata unit is
part of a strata community. Repairs and tenant behaviour are
special hazards when renting out a home unit - the rules
about repairs and tenant behaviour for strata owners.