Posted on August 16, 2018 by Sophia Urlich and Carlo Zoppo

UPDATE – NSW Government moves to regulate Airbnb and HomeAway by passing the Fair Trading Amendment (Short-term Rental Accommodation) Bill 2018

The State Government has almost finalised the first step towards regulating the short-term rental accommodation (STRA) industry and the practice of short-term holiday letting in New South Wales by passing the Fair Trading Amendment (Short-Term Rental Accommodation) Bill 2018 (Bill).

The Bill was passed by the Legislative Council on Tuesday, 14 August 2018 with no amendments.

This follows the initial introduction of the Bill by the Minister for Innovation and Better Regulation, Mr Matthew Kean, in the Legislative Assembly in June 2018, which we discussed last month. The Bill was previously passed with amendments by the Legislative Assembly on 20 June 2018.

The Bill now awaits Royal Assent.

As discussed last month, the Bill is part of a broader package of reforms, but specifically proposes to amend:

  • the Fair Trading Act 1987 to provide for a mandatory code of conduct (Code) applicable to all participants in the STRA industry; and
  • the Strata Schemes Management Act 2015 to allow strata scheme by-laws to prohibit STRA in certain situations.

In his Second Reading Speech, The Hon. Scott Farlow indicated that the State Government will review the entire package of reforms 12 months after the Code has commenced, in order to ensure that it is delivering on its intentions.

Of note from a planning perspective is s54E of the Bill that deals with the potential for inconsistency between the Code imposed under the Fair Trading Act 1987 and a development consent imposed under the Environmental Planning and Assessment Act 1979.

Section 54E provides:

  1. The provisions of a code of conduct prevail to the extent of any inconsistency with a condition of development consent imposed under the Environmental Planning and Assessment Act 1979.
  2. For the avoidance of doubt, subsection (1) does not in itself authorise the use of residential premises for the purposes of short-term rental accommodation if that use is prohibited by an environmental planning instrument.

It is difficult to pinpoint exactly how section 54E will affect planning laws because the Code has not been developed yet. However, section 54E(2) suggests that certain provisions of the Code may function to ‘authorise’ the use of residential premises for the purposes of STRA except where the use is prohibited by an environmental planning instrument.

The parts of the Code that may ‘authorise’ STRA could include those that set out the ‘rights and obligations’ of participants in the STRA industry or those that provide for the ‘registration of residential premises’ for the purposes of STRA arrangements.

We will keep you informed in relation to further developments, particularly as to the development of the Code and the introduction of a statewide planning instrument.

To discuss this blog, please contact Carlo Zoppo, Partner on 8235 9705 or Sophia Urlich on 8235 9708.

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