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Court rules that Airbnb style holiday letting is unlawful in a strata building

January 2, 2018 Headline News No Comments Email Email

The “Pinnacle” is an exclusive residential condominium on Grace Bay Beach in the Turks and Caicos Islands (see the photo).

The developer wanted to attract buyers looking for an exclusive place to live, away from the ‘riff-raff’ holidaymakers along the beach. So the developer included a strata by-law which banned owners from renting out their apartment for less than one (1) month

This ban was ignored by the owners of apartment 102, who rented to holidaymakers, usually with one week stays. The body corporate sued the owners for breach of the strata by-law.

The case was fiercely fought, all the way to Judicial Committee of the Privy Council in London, which was also Australia’s final court of appeal until 1986.http://www.tourismlegal.com.au/

The Privy Council ruled that it was lawful for the body corporate to enforce a by-law which restricted an owner from letting out their apartment for holiday lettings, because it was a residential building. And it was reasonable to draw the line at 30 days to distinguish a holiday letting use from a residential use. The ruling was made on 21 December 2017.

In the last year or two, the topic of banning Airbnb style holiday lettings in strata apartments has been hugely controversial in Australia. Both NSW Fair Trading and the NSW Civil and Administrative Tribunal have ruled that a strata scheme cannot pass a strata by-law to restrict in any way the right of an owner to rent out their apartment.

This decision from Turks and Caicos is from almost the last place on earth that you would expect to find a law case which could lead to a ban on Airbnb style holiday lettings in apartments in Australia. But that is what has happened!

The path is clear for all strata schemes in a residential zone to pass a strata by-law restricting Airbnb style holiday lettings by imposing a one (1) month minimum stay requirement, just like in the “Pinnacle”!

For more information on the decision and on Airbnb lettings, contact Anthony Cordato – ajc@tourismlegal.com.au

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