Changes coming for Short-term Rental Accommodation
The NSW Department of Planning have been working on a preferred method for managing the increasing numbers of short-term accommodation (SRA) (commonly referred to as Air BnBs) for some time now.
The Fair Trading Act defines a short-term rental accommodation arrangement as:
a commercial arrangement for giving a person the right to occupy residential premises for a period of not more than 3 months at any one time, and includes any arrangement prescribed by the regulations to be a short-term rental accommodation arrangement, but does not include any arrangement prescribed by the regulations not to be a short-term rental accommodation arrangement.
It looks like the Department has finally settled on a registration model for certain types of short-term rental accommodation. The new rules were originally slated to come into effect, 30 July 2021, however, this has been delayed by 3 months and at this stage will take effect 1 November this year. This follows the mandatory Code of Conduct for the Short-term Rental Accommodation Industry (Code of Conduct) which came into effect at the end of last year via an amendment to the Fair Trading Act.
Importantly for owners and managers of SRAs, upon the changes taking effect, there will be minimum fire safety and evacuation requirements that need to be met under the fire safety standard, and property owners looking to offer SRA need to register their property . Big penalties will apply to any SRAs that are not on the register. The register will be managed on the NSW Planning Portal. A property, upon a successful application, will be registered for a period of 1 year and a small registration fee ($65) will be applicable, and then $25 to renew the annual registration thereafter.
In addition to the above, the State Environmental Planning Policy (Affordable Rental Housing) (ARH SEPP) will include a new part, Part 3A, that deals with hosted and non-hosted short-term rental accommodation.
The ARH SEPP will contain the following definitions relevant to this type of development:
host means the owner, tenant or permanent resident of a dwelling who uses the dwelling to provide short-term rental accommodation.
hosted short-term rental accommodation means short-term rental accommodation provided where the host resides on the premises during the provision of the accommodation.
non-hosted short-term rental accommodation means short-term rental accommodation provided where the host does not reside on the premises during the provision of the accommodation.
permanent resident of a dwelling means a person who permanently resides at the dwelling.
short-term rental accommodation means a dwelling used by the host to provide accommodation in the dwelling on a commercial basis for a temporary or short-term period.
tenant has the same meaning as in the Residential Tenancies Act 2010.
The ARH SEPP will also contain the following provisions in relation to exempt development for the purposes of a Hosted and Non-hosted SRA:
The general requirements for short-term rental accommodation are—
(a) the dwelling must have been lawfully constructed to be used for the purpose of residential accommodation, and
(b) the dwelling must comprise, or be part of, residential accommodation other than the following—
(i) a boarding house,
(ii) a group home,
(iii) a hostel,
(iv) a rural workers’ dwelling,
(v) seniors housing, and
(c) the type of residential accommodation that the dwelling comprises, or is part of, must be permitted with or without development consent on the land on which the dwelling is located, and
(d) the dwelling must be registered on the register established under clause 186X of the Environmental Planning and Assessment Regulation 2000, and
(e) the dwelling must not be, or be part of, refuge or crisis accommodation provided by—
(i) a public or local authority, including the Department of Communities and Justice, the New South Wales Land and Housing Corporation or the Aboriginal Housing Office, or
(ii) any other body funded wholly or partly by the Commonwealth or the State, and
(f) if the dwelling is classified under the Building Code of Australia as class 1b or class 2–9—
(i) the dwelling must have a current fire safety certificate or fire safety statement, or
(ii) no fire safety measures are currently implemented, required or proposed for the dwelling, and
Note. Part 9 of the Environmental Planning and Assessment Regulation 2000 includes fire safety requirements for certain existing buildings or parts of buildings.
(g) the use of the dwelling for the purposes of short-term rental accommodation must otherwise be lawful, and
Note. In addition to the requirements set out in this Part, adjoining owners’ property rights, the applicable common law and other legislative requirements for approvals, licences, permits and authorities still apply. For example—
(a) section 137A of the Strata Schemes Management Act 2015 provides that a by-law may prohibit a lot being used for the purposes of a short-term rental accommodation arrangement, and
(b) conditions of development consent, or a lease, may impose additional restrictions.
(h) the dwelling must not be a moveable dwelling within the meaning of the Local Government Act 1993.
There are subtle differences between hosted and non-hosted SRAs. Namely, in a prescribed area (Dubbo LGA being the only regional location in the Central West) — the dwelling cannot be used for non-hosted short-term rental accommodation for more than 180 days in any 365 day period.
If for whatever reason all of the applicable exempt provisions cannot be met, then the development cannot be considered an exempt development under the SEPP, and a DA should be lodged through the relevant Council.
Note the above exempt provisions will not apply to the Byron LGA until 31 January 2022.
Disclaimer - this article is strictly for information purposes only. Detailed planning advice tailored to your specific circumstances should be obtained from a qualified planning consult. Andrew Crump Town Planning shall not be held liable for any error or emissions contained within this article.
