The advent of online booking accommodating services in recent years has seen a significant growth in the use of short-term rental accommodation.
In June 2018, the NSW Government announced its intention to establish a new regulatory framework for short-term rental accommodation, which was ultimately to comprise of a state-wide planning framework, a code of conduct, changes to strata laws, and a mandatory register of short-term rental accommodation premises.
Changes to strata law took effect in April 2020, allowing owners corporations to adopt by-laws banning short-term rental accommodation in lots that are not a host’s principal place of residence.
On 18 December 2020, the Fair Trading Amendment (Code of Conduct for Short-term Accommodation Industry) Regulation (No 2) 2020 (“the Amendment”) and the accompanying mandatory Code of Conduct for the Short-term Rental Accommodation Industry (“the Code of Conduct”) commenced operation.
The Code of Conduct introduces new minimum standards of behaviour and requirements for all participants in the short-term rental accommodation industry, including booking platforms, hosts, guests, letting agents and facilitators. The purpose of the Code of Conduct is to ameliorate the amenity impacts on neighbours of short-term rental accommodation arising from the behaviour of short-term occupants.
Some of the obligations introduced by the Code of Conduct are as follows:
- Booking platforms must notify persons using their platform to make bookings of the existence of the Code and their obligation to comply with it.
- Hosts must hold insurance covering their liability for third party injuries and deaths on the premises.
- Hosts must be contactable within ordinary hours to manage issues related to the premises, and contactable outside of ordinary hours in emergencies.
- Hosts must take reasonable steps to ensure that their guests comply with their obligations under the Code.
- Guests must not create noise that because of its level, nature, character, or quality, or the time it is made, is likely to harm, offend, or unreasonably disrupt or interfere with the peace and comfort of neighbours and other occupants of the premises.
- Guests must not intentionally, recklessly or negligently cause damage to premises, any common property or any other communal facilities within the immediate vicinity of the premises, any public property in the vicinity of the premises, or the personal property of neighbours of the premises or other occupants of a strata or community title scheme.
The Code of Conduct also create a complaints process for alleged non-compliances with the Code of Conduct, as well as a compliance and enforcement procedure to be utilised by the Commissioner for Fair Trading where non-compliances are found to have occurred.
Upon finding that an industry participant has failed to comply with their obligations under the Code of Conduct, the Commissioner is empowered to issue a warning notice, a direction requiring a person to do or not do something in relation to their conduct under the Code, record a strike against a host or guest, or record a host or guest on the exclusion register.
Guests, hosts and premises that are identified on the exclusion register are barred from participation in the industry for the duration of their listing on the register.
The government presently expects the remaining changes to the planning law framework to be effected in mid-2021, including a new planning policy for the consistent regulation of short-term rental accommodation across the state.
The short-term rental accommodation premises register is also under development and scheduled to commenced in mid-2021. Hosts will be required to register their premises once the register becomes available online.
For further information on these planning and environmental law updates, please contact Adam Seton on aseton@marsdens.net.au or (02) 4626 5077 and David Baird on dbaird@marsdens.net.au or (02) 4626 5077.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
