The advent of short-term stay platforms such as Airbnb and Stayz have been a boon both for those looking for extra accommodation options in popular locations and those looking to make some extra income from letting out a spare room or granny flat in their residence, or their entire property.
But this evolution of the internet’s ‘gig’ economy has also brought with it some pertinent legal challenges. For example, what are the implications of short-term letting when you own a property within a body corporate?
Bodies corporate are perhaps naturally predisposed to resisting the trend to short-term letting, worried about the overall effect of itinerant people passing through the property, a concern perhaps enhanced by some media horror stories of properties short-term let by people who use them for raucous, all-night parties.
A couple of court decisions in recent years have helped clarify the issue of whether a body corporate can, through its by-laws, ban owners from letting part of their property through a platform such as Airbnb, which we’ll look briefly at in this article.
The case of Hilton Park CTS 27490 v Robertson
In this 2017 Queensland Civil and Administrative Tribunal (QCAT) case, the position of owners within bodies corporate was clarified when the Tribunal ruled that unit owners were legally entitled to offer their units for short-term rentals. QCAT stated that any attempt made by the body corporate to restrict owners from using their property in this way through a by-law or by other means was invalid and was not enforceable.
The decision relied on s 180(3) of Queensland’s Body Corporate and Community Management Act 1997 (“BCCMA Act”), which essentially states that by-laws cannot restrict the type of residential use of the lot if the lot may lawfully be used for residential purposes. In addition to the above, as the term ‘residential’ has not been clarified or defined, it is to be broadly interpreted and so permits any residential use of the lot.
The decision in this case remains the law for properties which fall under the BCCMA Act.
More recently in 2019, the general view of banning short term letting was challenged by the Fairway Island GTP v Redman and Murray decision, where the body corporate successfully banned short-term letting through the use of a by-law.
The case of Fairway Island GTP v Redman and Murray
In this decision handed down in the Queensland Magistrates Court, a Hope Island resort on the Gold Coast successfully relied on one of its by-laws to ban short-term letting through platforms such as Airbnb by its lot owners.
The key difference with the decision in the Hilton Park case of 2017 is that the resort in question in this case remained governed by earlier legislation, the Building Units and Group Titles Act 1980 (Qld) (“BUGTA”), rather than the BCCMA.
Significantly, BUGTA does not place the same statutory restrictions on by-laws as the BCCMA, the latter ensuring that a by-law cannot be oppressive or unreasonable having regard to the interests of all owners or occupiers of lots and the use of the common property.
The implications
The vast majority of Queensland’s 50,000-plus strata schemes are governed by the BCCMA and so the decision in Hilton Park remains the more applicable law. But the decision in Fairway Park has emboldened managers of strata schemes to urge the state government to reconsider the ability of bodies corporate to restrict short-term letting by unit owners.
The Strata Community Association (Qld), for example, which represents more than 1.2 million Queenslanders who live in apartments, units, townhouses and other strata title property, welcomed the Fairway Park decision for restoring the power of the body corporate to make a by-law that “protects community interests”.
Additionally, some legal commentary has suggested that future applications by bodies corporate regarding short-term letting under the BCCMA may rely on the Magistrate’s interpretation of the term ‘residential’ under BUGTA in the Fairway Park decision.
For the majority of owners in Queensland, though, bodies corporate cannot prohibit the letting of your property through platforms such as Airbnb and Stayz through by-laws.
If you are unsure of the status of your property under the current law, and are interested in either undertaking, or preventing, short-term letting within the property, contact our Gold Coast lawyers today. We are experienced, expert legal professionals on all matters relating to body corporate and strata management. Call our body corporate team today on (07) 5555 0000.