We have held our tongue about this issue, but cannot hold it any longer. We understand that the innovation minister, Victor Dominello, will do anything to create Internet business within New South Wales. However, his action in relation to Airbnb is totally irresponsible.

Fair Trading has published a fact sheet for all owner’s corporations in relation to by-laws for Airbnb. In essence, Fair Trading have indicated that owner’s corporations cannot make by-laws outlawing Airbnb short-term accommodation.

The backdrop for this fact sheet is that owner’s corporations throughout Sydney have wanted to put by-laws in place to outlaw Airbnb where the property is zoned residential. If a building is zoned residential, it cannot have tenants less than 90 days. Any tenants staying there for less than this time are in breach of the Environmental Planning and Assessment Act 1979. Breaches can bring about orders under Section 121b of that legislation or can even lead to fines for those violating the zoning requirements.

Fair Trading argued that, the Strata Schemes Management Act 2015 prohibits the owner’s corporation from creating by-laws for the leasing of their property. Fair Trading argue in their fact sheet that any such by-law affects a tenants right to lease.  They go on further to state that, it is not the owner’s corporation’s responsibility to police the law.

The Strata Schemes Management Act 2015 also provides that no by-laws can be made, which are in breach of any law. How then can a law, which enforces the law, be in breach? Fair Trading’s argument is spurious and promotes an Internet business that they see as enhancing New South Wales tourism. This might be true, but it is not lawful.

Yes, the legislation does prohibit the owner’s corporation of anything that will affect a person’s right to lease. If Airbnb is an unlawful methodology of leasing, the owner’s corporation isn’t preventing their right to do anything in relation to leasing their property. All the by-law is doing is preventing an illegal action. How this is unlawful, we don’t know.

If an owner’s corporation wants to prevent Airbnb because it is residential, go for it. This is why there is a separation between courts and administers. The courts and tribunals interprets the law, not the politicians and departments. They may make them, but they have no right to enforce them. We cannot see how NCAT could ever outlaw by-laws, which require compliance with the law.



This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538