Sydney Morning Herald columnist Jimmy Thompson wrote an interesting article in his Flat Chat column recently headed “Guerrilla warfare warning over holiday lets in apartments”.

Under current strata laws, an Owners Corporation can only legally ban short stay letting if its building is zoned residential. Under the proposal before Government, apartments (and stand-alone houses) in residential zones will be exempted.


 

Jimmy noted that “hundreds of apartment blocks” are already blocking holiday letting though dodgy by‑laws and other tactics such as cancelling electronic access keys to doors and lifts (for “security reasons”) and locking guests out of swimming pools, gyms and car parks. He even quoted one long-term chairwoman as saying that putting super-glue into locks “works faster and more effectively than any laws or by laws!”.

As this battle rages on, members of Strata Committees are wasting considerable time and money sitting in lawyers’ offices or NCAT trying to find a legal means of stopping short-term lettings in their residential buildings. As Jimmy states, strata committees (who are untrained volunteers) are endeavouring to police the practice by taking photos, noting dates, keeping financial records, issuing warnings and litigating. This is unreasonable and the sense of community associated with living in strata is being destroyed.

 

Management Rights – A Ready Made Solution!

Online companies such as Airbnb and Stayz are game changers and are causing all sorts of concern in the world of strata. A simple solution to the problem is to make sure these large residential buildings have strong onsite management.

Onsite building managers are not only responsible for performing or supervising the day-to-day maintenance of the building, they are also usually granted exclusivity to be the only party capable of operating an onsite letting business. However, the conduct of this business is regulated by the by‑laws and the Letting Agreement between the Owners Corporation and the onsite manager. In other words, the manager is directly answerable to the Owners Corporation for its actions. By contrast, the Owners Corporation has next to no control over owners and tenants operating under the Airbnb or Stayz model.

An onsite building manager knows exactly what is going on in the building. They know what units are being short-term let via Airbnb or Stayz. They can report these issues to the committee and be the interface between the tenants and the Owners Corporation. It should not be left to neighbours to have to spy on neighbours.

 

Developers need to Step Up

Developers need to start seriously thinking about life in their buildings after they are gone. Instead of settling their sales and hoping that the strata legislation will look after the ongoing management of the buildings, developers need to be spending more time thinking about long-term governance and harmony issues in their buildings. The developer is THE person who sets the tone of the building as they determine the by-laws and how the building is managed once the developer has washed their hands of the development. They need to set up structures that make the life of owners easier and the incorporation of fair, long-term caretaking and letting agreements, supplemented by appropriate by-laws, is a good start.

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

 

 

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Management Rights Articles

  • BUILDING MANAGERS & COMMITTEES

    Legally, Owners Corporations or Bodies Corporate are viewed as corporations. They derive their power from the relevant State strata legislation and by-laws. Like any corporate, they need to be able to delegate part of their decision-making authority – hence we have Committees.

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