Another Short Term Rental Ban By Law Falls Over in NSW
The Owners – SP No 91684 v Liu; The Owners – SP No 90189 v Liu [2022] NSWCATAP 1
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2022 NCAT Appeal Panel decision is about a dispute in two very large title buildings in Sydney Olympic Park about by laws restricting short term rental. Both strata buildings made by laws under the new s 137A provisions in NSW strata laws banning short term rentals in strata lots that were not the owners’ primary place of residence, restricting short term rentals in other strata lots, and imposing access restrictions and liabilities for breaches. The key issues were whether some parts of the by laws could be validly made or whether they were harsh, unconscionable or oppressive and what do with the by laws if they were. After considering the by laws and the well know decisions in Tate’s Case and Coopers Case, the NCAT Appeal Panel decided that two provisions of the by laws [restricting building access and imposing costs like they are strata levies] were invalid and, as a result, the by laws should be removed. The decision is a reminder of that imposing restrictions on strata owners’ fundamental property rights under by laws is difficult and will be strictly controlled by Courts and Tribunals. It’s also interesting as it’s the first anti short term rental by law that’s been considered after the new strata law provisions allowing those kinds of by laws started, and it was overturned.
Implications
The key implications of this strata case are as follows.
Once again, a by law restricting short term rentals in a strata building has been invalidated.
Courts should just interpret the language of a by law and not consider outside materials or circumstances unless the by law is ambiguous or obscure.
Short term rental under s 137A is defined in the Fair Trading Act as being for less than 3 months.
3 key tests apply to determining if a by law is harsh, unconscionable or oppressive under s 139(1).