NSW Minister for Innovation and Better Regulation Matthew Kean has announced in the NSW Parliament his proposed sweeping legislative changes that will facilitate the financial objectives of an unknown number of short-term holiday letting platforms. These platform operators – almost all foreign owned - seek direct and full access to NSW housing. (Click Hansard transcript, go to June Wed 6 – pages 9-11.)
A University of NSW Report concluded in 2015 that there were at point in time 1,715 registered residential and mixed-use strata schemes in the Sydney Local Government Area alone, containing 73,486 residential lots (these figures exclude commercial-only strata). Ministers Anthony Roberts (Housing and Planning) and Matthew Kean will have access to the current number of registered residential strata schemes and lots State-wide, plus the number of NSW Residents living in R2 low density Residential Zones.
Our NSW Ministers and Parliamentary Inquiry Members have not responded to requests for a list of Legislative instruments that were considered during their “Inquiry Into the Adequacy of the Regulation of Short-Term Holiday Letting”. It has therefore not been possible to establish the entire scope of legislative changes that will be required to meet the commercial demands of Airbnb, Expedia, HomeAway, Booking.com, et al. Brief:
Residents who made a conscious decisions to purchase homes in NSW R2a low density Residential Zonesin order to be free of commercial operations will, it seems certain should Minister Kean have his way, find themselves living in unregulated short-term holiday, transit and venue zones.
Without any access to Ministers, one understands that holiday houses will be classed as ‘Exempt Development’. By way of an example: The NSW State Environmental Planning Policysays for Residents in and around Yamba, that under their Local Environmental Plan (LEP), referred to as a ’standard or non-standard plan’, serviced accommodation is not permitted in R2 zones.
State Environmental Planning Policy (Exempt and Complying Development Codes) 2008
(9) Additional exempt and complying development under standard and non-standard plans (LEP). If a standard plan or non-standard plan (LEP) specifies exempt development or complying development that is not the same as development specified as either exempt development or complying development in this Policy, this Policy does not affect the operation of that plan in relation to that development.
Minister Kean must hope to circumvent all such legislation, in order to aid short-term holiday letting platforms.
Residents who complied with legislation and sought Development Approval to covert a NSW Class 1(a) (free standing, single family) dwelling in order to offer Class 1(b) or Class 3 (Bed & Breakfast operations), who invested in the major upgrading of their properties and are engaged in paying commercial rates and associated Government charges…these Residents will find that they are now competing with an unknown number of unregulated, unlicensed, powerful short-term commercial operators. No mention has yet been made as to whether all commercial Accommodation facilities will be deregulated or whether compensation is to be paid to Residents and those who have invested in and meet all commercial operating standards.
Residents who have, after all due diligence and consideration, purchased NSW Class 2 Residential flat dwellings (Strata/Company Title apartments) will see the Residential Determination Approvals and Residential Zoning on their property set aside. Unless National Construction Codes etc can be circumvented in order to cater for hotel guests, one assume that every Strata and Company Title building State-wide must be required to undertake major structural retrofitting in terms of fire safety and for access for persons with a disability. The NSW Land and Environment Court: “(This) will likely lead to a disproportionate financial burden on long-term residents in terms of retrofitting the building and, as well, for operational repairs and maintenance.”
Minister Kean will retrospectively set aside all applicable Federal, State and Local Government legislation, and in Strata, will pass responsibility for short-term rental control etc to those living in our Residential Strata Schemes - the individual Lot Owners.
Minister Kean wants to amend the NSW Strata Schemes Management Act 2015 to see Owners Corporations attempt to pass a By-Law by special resolution whereby they might arrive at controlling short-term letting in their building, but only if the landlord/s engaged in short-term rentals do not live in the building full-time.
Minister Kean has produced this text:
Proposed new Section 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.
Minister Kean’s proposed By-law seems completely at odds with what by-laws MUST NOT DOunder the Strata Schemes Management Act. Section 139 of the Act is clear:
Restrictions on by-laws - 139 Restrictions on by-laws
(1) By-law cannot be unjust. A by-law must not be harsh, unconscionable or oppressive. Note: Any such by-law may be invalidated by the Tribunal (see section 150).
(7) Community management and precinct management statements prevail over by-laws. A community managementstatement or a precinct management statement prevails to the extent of any inconsistency with a by-law for a strata scheme that is also part of a community scheme or precinct scheme.
Minister Kean: A by-law should not be permitted to alter the Residential status of our property. Minister, the precinct management statements, Residential Strata Scheme restrictions, Company Title terms and conditions, plus Residential Zoning should not be overridden or changed retrospectively. These are the conditions under which NSW Residents have purchased or rented residential premises. To claim ignorance of these conditions does not suffice. A change – any retrospective change – must be considered “harsh”.
Section 54A of the NSW Fair Trading Act 1987 stipulates that a short-term rental accommodation arrangement is any period of less than 3 months at any one time. This Act/Section reinforces:-
Section 8(h) of the NSW Residential Tenancies Act, which stipulates that an agreement made for the purpose of giving a person the right to occupy residential premises for a period of not more than 3 months for the purpose of a holiday, is not a Residential Tenancy Agreement.
There isa long line of judicial authority – NSW Land and Environment Court (LEC) case law - when it comes to Residential properties and their "Illegal Use" as short-term tourist/visitor rentals.
The LEC judges: “The harm caused to the environment (by short-term tourist/visitor rentals) is not limited to the undermining of the Planning regime. The adverse impact on the amenity and wellbeing of Residents has been, as the evidence overwhelmingly demonstrates, severe.”
The LEC judges: Mixing short-term holiday rentals with permanent residents "fundamentally incompatible".
The LEC judges: “A tenancy granted to persons who are residing in a group situation for periods of a week or less for the purposes of bucks and hens nights, parties or for the use of escorts or strippers, is, in my opinion, not consistent with a use or occupation by a family or household group in the ordinary way of life, and therefore, not consistent with the use of the property as that of a “dwelling-house”…. Inherent within the term “domicile” is, as a long line of authority in this jurisdiction has established, the notion of a permanent home or, at the very least, a significant degree of permanence of habitation or occupation…”
The LEC notes: Respondents in cases before the Land and Environment Court have readily agreed that they cannot guarantee compliance with any House Rules or the Code of Conduct.
The LEC judges: The actions of Agents - Real Estate Agents / booking platforms - who engage in diverting residential housing away from residential use as "Illegal".
Minister Matthew Kean and his fellow Members of Parliament wish to see this “Illegal” activity deemed “Legal”.
(Our Community Group is unfunded. Please feel free to refer this information to your Legal professionals.)
The actions of our State Ministers and MPs will see NSW Residents compelled to deal with unending uncertainty and distress whilst locked into ongoing legal proceedings, all the while attempting to protect their homes, their property and property rights, and their residential communities.
Homes not Hotels Communities not Transit Zones People before Profits
Neighbours not Strangers