Short term letting – Decision challenged

How Airbnb (or short term letting generally) operate in bodies corporate has been covered off in various articles. In short:

• by-laws regulated by the Body Corporate and Community Management Act 1997 (Qld) (BCCMA) cannot regulate the use of a residential lot;

• local councils can (and sometime do) regulate the use of a residential lot; and

• the building class under the National Construction Code does not impact on the short term use.

There are reports that an owner is challenging Noosa Council’s decision to prohibit short term letting of their residential lot. In this article we discuss what this might mean for a body corporate.

By-laws

To recap the position, by-laws created pursuant to the BCCMA cannot interfere with how a residential lot is used. We have previously discussed this here: https://smartstrata.com/by-law-limitations-series/.

However, bodies corporate regulated by the Building Units and Group Titles Act 1980 (Qld) can impose by-laws that restrict short term letting. We also discussed this here: https://smartstrata.com/bodies-corporate-and-airbnb/.

Council

The council’s rulemaking powers (at least in relation to short term letting) are not limited in the same way as a body corporate’s by–laws are limited.

Relevantly, a council’s planning scheme can determine whether short term letting (or other types of use) is permitted automatically. If the use is not permitted automatically, a person may make an application to council for the approval of the non-permitted use.

If a property is used contrary to council’s permission, the lot owner can be fined. Some councils are better resourced and motivated to enforce these rules than a body corporate might be.

Challenging council

A Noosa lot owner, who had been using their property in a duplex for short-term letting, applied to the council for permission to continue do so. Council’s position was that the planning scheme does not allow for short-term letting for the relevant property and therefore denied the application. Ordinarily, this would be the end of the road for the lot owner. There’s no point in taking on a well-resourced council over an issue that has had significant public support in the area. However, the property owner has decided to challenge the Noosa Council’s decision in the Planning and Environment Court to determine whether the Council’s planning scheme does actually prevent short-term letting.

Although this owner’s challenge will be limited to the interpretation of Noosa’s planning scheme, it will be significant to determine:

• what lengths will a Council go to in order to prevent short-term letting;
• if Council is unsuccessful, will it consider amending the planning scheme to tighten up its restrictions;
• will it lead to a floodgate of other applications for short-term letting in the area;
• will other councils take steps to change their planning schemes to tighten up any short-term letting restrictions;
• how much will all of this cost the property owner; and
• will the views of the other lot owners in the body corporate be taken account of by council or the Court.

Short-term letting continues to be one of the most polarising issues in strata.

Without legislative reform to the BCCMA, the majority of bodies corporate will continue to be spectators as to how council will address short term letting. Due to the fact that planning schemes vary across council areas, the issue will continue to be one that is treated differently across the state.

This article was contributed by Todds Garsden, Partner – Mahoneys.