The Residential Tenancies Act 2010 (NSW) (the ‘Act’) and Residential Tenancies Regulation 2010 (NSW) impose certain rights and obligations on landlords and tenants. Together with the agreement(s) between the parties, these provisions form the landlord-tenant relationship. The Act is an important piece of legislation because it provides for some rights and obligations that apply regardless of what the parties agree and also void some rights and obligations, even if the parties have agreed to them. In addition, the NSW Civil and Administrative Tribunal also has the authority to settle disputes for tenancies covered by the Act. In providing these controls, the Act creates a bare minimum level of protection for both landlord and tenant.
Online short-term rental platforms such as Airbnb pose a set of issues for the application of the Act. At present, the Act does not apply to agreements giving a person the right to occupy residential premises for a period of less than 3 months for the purpose of a holiday. In this case then, the Act would not apply if an Airbnb host gives a guest a rental for less than three months.
In late 2018, the NSW Parliament passed amendments to the Fair Trading Act (1987) (the ‘FTA’) and the Strata Schemes Management Act 2015 (NSW) (the ‘SSMA’) that affects short term leasing.
The FTA has been amended to impose a code of conduct (the ‘Code’) that applies to a ‘short-term rental accommodation arrangement’. For brevity, we refer to this as a short-term rental. This Code applies to everyone involved in short-term rentals, including home owners, hosts, booking platforms and anyone that ‘facilitates’ a short-term rental. However, the short-term rental must be (i) commercial, (ii) for residential premises and (iii) for a period of less than 3 months. The commercial requirement just means that money must be paid for the rental, thereby excluding arrangements where family or friends use a property. The content of the Code includes prohibitions on interfering with other residents’ quiet and peaceful enjoyment of their property. The new regime also penalises persons who breach the Code twice in two years with a ban from being involved in short-term rentals for 5 years. An online register is also being created to list those who are banned, with platforms such as Airbnb being required to check prospective renters against this database.
The SSMA has also been amended to more clearly outline when and how a strata scheme can ban short-term rentals. Short-term rentals can be banned provided that the by-law is passed via special resolution (75 percent voting in favour of the ban) and only against short-term rentals from units that are not the owner’s principal place of residence. One implication of the latter restriction is that owners cannot be prevented from letting out spare bedrooms in their principal place of residence.