Another Short Term Rental Ban By Law Falls Over in NSW
The Owners – SP No 91684 v Liu; The Owners – SP No 90189 v Liu [2022] NSWCATAP 1
Quick Read
This 2022 NCAT Appeal Panel decision is about a dispute in two very large title buildings in Sydney Olympic Park about by laws restricting short term rental. Both strata buildings made by laws under the new s 137A provisions in NSW strata laws banning short term rentals in strata lots that were not the owners’ primary place of residence, restricting short term rentals in other strata lots, and imposing access restrictions and liabilities for breaches. The key issues were whether some parts of the by laws could be validly made or whether they were harsh, unconscionable or oppressive and what do with the by laws if they were. After considering the by laws and the well know decisions in Tate’s Case and Coopers Case, the NCAT Appeal Panel decided that two provisions of the by laws [restricting building access and imposing costs like they are strata levies] were invalid and, as a result, the by laws should be removed. The decision is a reminder of that imposing restrictions on strata owners’ fundamental property rights under by laws is difficult and will be strictly controlled by Courts and Tribunals. It’s also interesting as it’s the first anti short term rental by law that’s been considered after the new strata law provisions allowing those kinds of by laws started, and it was overturned.
Implications
Once again, a by law restricting short term rentals in a strata building has been invalidated.
Courts should just interpret the language of a by law and not consider outside materials or circumstances unless the by law is ambiguous or obscure.
Short term rental under s 137A is defined in the Fair Trading Act as being for less than 3 months.
3 key tests apply to determining if a by law is harsh, unconscionable or oppressive under s 139(1).
Full Report & Case Details
This 2022 NCAT Appeal Panel decision is about a dispute in two very large title buildings in Sydney Olympic Park about new by laws restricting short term rentals.
Both strata buildings made by laws under section 137A of the Strata Schemes Management Act 2015 about short term rentals.
The by laws that did the following things:
banned short term rentals in strata lots that were not the owners’ primary place of residence,
restricted short term rentals in strata lots that were primary residences,
allowedthe strata building to deactivate building access devices if there were breaches of the by laws [under clause 10(b)], and
entitling the strata building to recover its costs and expenses of enforcing the by law as a strata levy [under clause 10(e)].
Section 137A of the Strata Schemes Management Act 2015 was introduced in 2020 and allows strata buildings to make by laws that prohibit a strata lot being used for short term rental accommodation if the strata lot is not the principal place of residence of the person arranging the short term accommodation.
A strata lot owner who was using their strata lots for short term rental in the two strata buildings challenged the by laws' validity.
The primary issues in the case were whether the conditions to the by laws about access devices and costs and expense recovery could be validly made, whether they were harsh, unconscionable or oppressive under section 139(1) of the Strata Schemes Management Act 2015, and what to do with the by laws if they were; ie: whether they could continue without these provisions.
In making its decision the NCAT Appeal Panel reviewed the by laws, the meaning of short term accommodation and the decisions in Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250, Owners SP 3397 v Tate [2007] NSWCA 207, and Gelder v The Owners Strata Plan No 38308 [2020] NSWCATAP 227 and concluded …
Keywords
#NSW #NCATAppealPanel #bylaws #shorttermrental #harsh #unconscionable #oppressive #2022 #SSMA2015 s82 #137A #s136 #s139(1) #FTA1987 #s54A