Two Strikes and You’re Out – Short Term Rental Code

The NSW Government has given property investors and their neighbours a special Christmas present.  From 18 December 2020 a new Code of Conduct applies in NSW to all short term letting.  Media attention has been on the tighter rules for unruly guests with “two strikes and you’re out” rules.  However, this benefit for landlords and investors comes with some new obligations. Some short term letting platforms and agents and landlords will have to lift their game.

Under the new Code, short term renters can’t make noise and disrupt neighbours or cause damage and are responsible for their visitors. Renters that offend can be fined or listed on a new “exclusion register” that can ban offenders from short term rental for 5 years.

The Minister says there will be a “two strikes and you’re out” policy.

Landlords have new obligations under the Code, to:

• hold third party personal injury and death insurance;
• give neighbours daytime contact details (for the owner or an authorised representative);
• take reasonable steps to ensure that renters know about the Code; and
• not rent to “excluded” renters.

Next year a new short term rental register will require owners and premises to be registered. Only registered owners will be able to advertise their premises for short term rental.

Complaints will be made to Fair Trading. Neighbours can still complain to the Police and Local Council.

This has been a live issue for a few years: https://www.cml.com.au/beware-the-ides-of-short-term-rentals-short-term-lettings-and-property-investors/

Peter McNamara says: “Investors in residential property must keep up with the rapid changes in the laws around renting and development. One plus for landlords is that rentals of less than 3 months are not covered by residential tenancy laws. However, if you have a strata investment property, brush up on the changes from 10 April 2020. Your owners corporation can now pass by-laws limiting short term rentals unless the lot is your principal place of residence. If you live in your PPR strata lot, you can still rent it out while you live there or are away temporarily.”

We expect to be reporting on a new SEPP (State Environmental Planning Policy) on short term rental accommodation in 2021.

For those keen to know more, read the Code here:

Code of Conduct for the Short-term Rental Accommodation Industry

Contact Peter McNamara for advice on your property and investment legal matters.