AirBnB Enforcement Explained
“What is the situation with AirBnB?” is a question my Office is increasingly asked, and a question I get asked often at seminars and other events.
The question is probably better expressed as, “Where does a lot owner or a body corporate stand in relation to short-term letting under the legislation?”
For the purposes of this article, I will refer to “AirBnB” when I talk about short-term letting. Of course, there are many different short-term letting platforms apart from AirBnB.
It is probably worth reminding ourselves and anyone who is not familiar with it, what AirBnB is and how it operates. In a nutshell, AirBnB is a platform where people can provide part or all of their home to be available for letting for whatever period of time they choose. People who want to stay in an AirBnB property create a profile and then they and the provider liaise directly to finalise the arrangements.
How AirBnB is treated in other jurisdictions has been in the news quite often of late. For example, in Berlin, owners who rent out more than half of their properties without city council permission face fines of up to $100,000, while in New York City, fines apply to landlords letting out their properties for less than 30 days. Recently in New South Wales, new laws were announced which will give bodies corporate the ability to pass a by-law prohibiting short-term letting in certain circumstances.
While these are interesting developments, my focus is on the situation in Queensland only as it stands and only in relation to the body corporate context. For any lot owner who is thinking about or engaged in offering their lot on AirBnB, there are several other considerations including planning and zoning requirements and tax implications. My Office cannot provide information about these issues and advice should be sought from the relevant government agency, or independent legal advice obtained.
Generally, concerns and disputes about AirBnB are by-law issues and the relevant section of the Body Corporate and Community Management Act 1997 (the Act) is section 180(3), which provides that:
“If a lot may lawfully be used for residential purposes, the by-laws can not restrict the type of residential use.”
This section has been consistently interpreted in adjudicators’ orders as making clear that the body corporate is not empowered to prohibit short-term letting—such as AirBnB—through a prohibitive by-law. Remember, by-laws are meant to regulate, rather than prohibit.
In Macleay Tower & Villas [2017] QBCCMCmr 12 (17 January 2017), the adjudicator considered a dispute brought by a lot owner against the body corporate in relation to a by-law which stated that the owner would “be responsible for ensuring that any residential tenancy shall be permitted only for a minimum of three months”.
The committee argued that short-term tenancy is not a ‘residential use’ in relation to section 180(3) of the Act because, among other things, “the defined meaning of ‘residential’ implies living in a place over a period of time, a sense of permanency and a sense of belonging to a community. Short-term tenancies do not have these characteristics.” Other owners made submissions along similar lines.
The adjudicator found that they had “no reason to depart from a number of other previous decisions in which by-laws prohibiting short term letting have been found to contravene section 180(3) of the Act. The short term occupation of a residential unit for holiday purposes would still be a type of residential use for the purposes of section 180(3) regardless of the separate question of whether short term letting is allowable according to the building classification.”
In another adjudication, Lynkim Lodge [2016] QBCCMCmr 419 (14 September 2016), where a similar dispute was brought by an owner against the body corporate, the adjudicator stated that, “It would be contrary to the Act for the Body Corporate for Lynkim Lodge to record a by-law that prevented owners from leasing their lot for less than three months, regardless of whether the rental was arranged directly or via a traditional property manager or via a rental service such as Airbnb”.
Given that these cases appear to make the situation with AirBnB clear, a body corporate or a lot owner with concerns about AirBnB in their scheme needs to turn their mind to what practical steps they can take.
I would suggest that if a body corporate or owner has concerns, they should try to narrow their focus to what precisely is their issue—is it noise? Nuisance? Parking? Security? It is important to narrow the focus this way because, as we have seen, simply disliking AirBnB on principle will not achieve much.
Once the focus has been narrowed, devote attention to that. If, for example, the concern is about the noise AirBnB residents are making, the body corporate could consider addressing those concerns with the owner who is letting out their lot on AirBnB, making them aware of the noise issues, and also making them aware of any by-laws about noise which are applicable. Sometimes, a reminder about by-laws may have a positive impact on reducing noise concerns. This may also be a prompt for the body corporate to consider reviewing its by-laws to ensure they remain relevant and responsive to AirBnB.
All adjudicators’ orders, including the ones cited in this article, can be found at www.austlii.edu.au.
For further, general body corporate information please contact my Office on 1800 060 119 or visit our website www.qld.gov.au/bodycorporate.
This article was contributed by Chris Irons, Commissioner for Body Corporate and Community Management.
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Airbnb is simply an advertising platform where owners can advertise their property, in addition its payment platform runs rings around the on site management model.
We live at the Gold Coast where many owners short term let their property it can be through a resident building manager which in my view should be the best deal but sadly it’s usually the most expensive and the poorest service because like taxis it was almost a closed shop. Technology has disrupted that. Now there are businesses dedicated to managing your Airbnb listing. Short term letting has always been available if any of you can remember going through the classified adds in the local paper looking for a holiday rental, Airbnb is simply the 21st century version of that. The public need to stop blaming Airbnb as what they are doing has always happened. The garbage that turns up in out building by the on site manager and booking.com etc is a much bigger worry.
Another well thought out article from our Commissioner. Thanks Chris!
There are things that a Body Corporate can do about the undesirable behaviors of short term tenants. Have a read of this for some ideas….
https://stratumlegal.leapwp.com.au/wp-content/uploads/sites/455/2017/05/Article-The-Pairing-Economy.pdf
Hi Cameron, respectfully, you are wrong on a number of counts.
First, by law an owner can change their (licensed) letting agent on not more than 30 days notice.
They can use whichever agent they want, or (as you correctly point out) let out themselves. So hardly a ‘closed shop’.
Second, an onsite manger can toss out a badly behaving short term tenant, on the spot. Absentee owners who use ‘sharing’ platforms almost always don’t, sometimes because they don’t even know about the bad behavior until the stay is over (and I hazard that is one reason why these sharing platforms are causing so many problems).
Finally, the difference in the ‘move fast and break things’ mindset of the new app platforms, is ‘to hell with regulation, lets get so big so fast that they have no time to properly regulate us’. In my view a number of these platforms are acting as real estate agents, and they are not licensed when they ought to be. Licensing is what protects the public and frankly, avoiding licensing is one of the reasons that these models are cost competitive.
Hi Chris,
Thanks for the article about Airbnb.
I would like your comments on the following as well as I think the rights of the Letting Agents are being ignored in this discussion, as well as the logistics of policing By laws.
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What happens to the legal rights of the Resident Letting Agent who has an agreement with the Body Corporate to let units, weather Holiday let or permanent, and paid a hefty price to purchase this business, if owners are allowed to bypass them and let their unit through Airbnb.
Some properties have by laws which stipulate that a unit owner is not allowed to run a business from their residential unit. Where does Airbnb stand in terms of running a business. Isn’t a unit owner who short term lets through Airbnb running a business.
How would you expect a landlord who lives away from a property be able to police noise controls from a rowdy Airbnb guest, when they are not on site.
By the time they are aware of the noise complaint, vandalism etc etc the guest has left., and the reputation of the property has been damaged.
It should not be the Resident Letting Agents job to sort out issues with someone else’s guest.
Your comments would be appreciated.
Hello Kerryn and thanks for your comments, I acknowledge them all (indeed, I acknowledge all the comments made in response to this article – it seems to be a topic of some interest). The intent of my article was only to focus on Air BnB in relation to adjudicators’ orders made from my Office. I’m unable to comment on the other matters. If there are queries about by-laws and their enforcement, I would recommend contacting the Information and Community Engagement Unit of my Office on 1800 060 119 for further information.
When an organisation purchases the Management rights for a building in Queensland. They pay a lot of money to purchase the business, there are 3 parts to the agreement, now 2 part agreements are also being sold. In the original 3 part agreement set up by the Developer, there is a unit for occupation, the contract to manage the building and the Letting agreement. These were originally either 10 or 25 year agreements. They obvioulsy have a vest3d interest due to what they have paid for the business to manage the building and look after owners and tenants. An owner of course can use an outside agent. But they cannot advertise in the building because of the exclusive use Letting agreement contract. When the onsite Manager is letting investment units either Fixed term or holiday let as per the building registration, then they know who is residing in the unit. Even if an outside agent is letting fixed term the ByLaw usually says they are required to notify the Body Corp of tenant details. With a holiday let building as with a hotel every ‘guest’ has to verify their identity when booking in. The problem with AirBandB is that legislation and technical has not caught up with the fact that it is way beyond, someone renting out a room with. Mattress or their place when they go away. It is now. Big business with companies running hotels without being in a particular building to ensure the guest is doing the right thing. The Body Corp of a building should be able to have resident/guest identity when they are staying in a building form a security and safety issue. Someone needs to set up a registration platform for each building where people are required to register before the stay. We used to own a small backpackers in Brisbane and every guest had to sign in with their details. Management Rights onsite managers register all guests, why should airBndB and other short term offsite Letting agents be allowed to give access fobs and keys to people without the onsite manager/body Corp not being notified. It is about time the review of the BC Qld legislation commenced in 2014 and still continuing needs to address these concerning issues and Act ASAP.
thank you Michael for your well informed article on The Pairing Economy ( a must read)
once upon a time, owners were empowered to make decisions which affected their community and were considered a mini -council and by-laws actually meant something. no one would dare to breach a by-law. Unfortunately, in the 21st century anyone can write to the Commission without regard for the collective community and an adjudicator may determine what is fair and reasonable even though 75% of owners may oppose that decision. Prime example is the sharing economy and pets in strata… strata is the ownership and occupation of multimillion dollar properties and the key to harmonious strata living is not hundreds of sections of strata legislation but people observing the basic rules of common sense and decency. We need an urgent and informed dialogue about the way we look after our built environment and the way we relate to one another.
Michael,
I respectfully disagree as an on-site manager is exactly that and has duties to the body corporate and all owners. An on site manager would be asleep at the wheel and derelict of his duties if he left a bad behaving occupant in a unit without taking steps to rectify the situation or contact the agent or owner. It has zero to do with the platform as 30 years ago owners could advertise apartments for holiday rental in the classified adds.
Any on site manager / caretaker ignoring bad behaviour in any unit is a poor manager and if it got out of hand call police or security.
It’s common sense really. Be respectful of each other’s rights. A property owner should have the right to manage their investment any way they wish. What goes on inside the walls of your own property is no one else’s business, unless, it becomes a nuisance to others. Then it should be a matter of communication and negotiation with managers and body corporates who are there to regulate common areas and issues for all residents. Not there to prohibit an owners use.
Issues of security and noise can exist in all strata living. These issues are not restricted to one type of resident or guest (long or short)
Residents should always take care of their own security by locking cars and apartment doors no matter what, apartment complexes should always have access to security companies in case their is an issue.
Airbnb hosts should be aware of the nature of the complex. Is it quiet and residential? Then they need to enforce a no party policy as a house rule, expect a short term guest to explain their reasons for staying, have limits on the number of guests, and always question before accepting a booking.
All apartment complexes have guests. Whether they are paying guests or not. You can not restrict owners or occupiers from having guests. But you should be responsible for their behaviour whilst on your property.
Simply not liking the fact that they are paying/short term guests is not a good enough reason to restrict an owners right to manage their own investment.
My neighbours have no issues with my short term guests, and in fact they use my Airbnb to their advantage when they have family or friends come to stay. My guests contribute to the local businesses in the area and what that can generate to the community in terms of tourism.
If there is ever an issue with noise or security (have never had one yet) then at least the guests are gone the next day, unlike more longer term renters who can consistently cause communal issues for neighbours with noise, parking and security and this is much harder to address when they have a long term lease.
It’s about regulation, communication, and common sense, not control, bias and assumptions.
If you have an issue with short term letting in your building due to bias and assumptions then I suggest you educate yourself about how these platforms work. Every guest must submit official identification before they can book, every owner has the right to choose the kind of guest they would prefer (ie families or couples only) every owner also sets house rules which must be followed and if not, these guests will be banned and a security deposit will be withheld. It is in their own interests to behave themselves. It is also in the owners best interests to maintain the value of their property, yet still have the ability to cover costs of owning it withought being told how they are allowed to do it by managers and Body Corporates.
Common sense and communication are the key.
Hi Cameron,
I appreciate your point (onsite manager’s duties) but it’s based on a misconception.
An onsite manager has two jobs, to look after the common property (caretaking agreement with BC) and to run their own letting business (letting agreement with BC and letting appointments with owners).
Under the letting agreement with the BC the onsite manager has zero responsibility to manage the tenants of owners who do not have a letting appointment with the onsite manger; i.e. tenants from Air BnB etc. (In fact, if they were to interfere and to try to manage them, they are just as likely to face a suit in tort for interference with contract!)
Under the caretaking agreement with the BC, the onsite manager will sometimes have a duty to ‘monitor and report on any serious or persistent breaches of by-laws’. If a tenant is breaching the by-laws, then the onsite manager will report it; to the committee and if they are pro-active to the owner of the lot. Now the BC can go through the by-law enforcement process (https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/by-laws/enforcing-by-laws ) and by the time that process goes anywhere, the offending tenant is long gone.
The owner on the other hand can turf the tenant, on the spot, if they have appropriate ‘conditions of stay’ (and the tenancy is not otherwise regulated, for example under the Residential Tenancies and Rooming Accommodation Act).
In my experience, which unfortunately is almost always when things go wrong(!), is that an owner using a ‘sharing’ platform will almost never turf the tenant, because the by-law enforcement process is slow and expensive (and thus a low risk) while the tenant’s money is much more attractive than doing the right thing. On the other hand onsite mangers will almost always turf the tenant because it affects their business.