Can You Airbnb a Strata Property in Australia?

If you own a property within a body corporate and find there may be times when this is vacant for long periods, you may consider renting this space out on Airbnb, which is a good way to make money on the property when it’s not being used.

However, ongoing tensions between landlords renting out properties and local residents have garnered much media attention, and in certain states, laws and regulations have been brought in to regulate this. In this article, we will outline whether you can Airbnb a strata property to give you a clearer picture of what can and can’t be done in South Australian and Adelaide strata properties.

Table of Contents

•   Can You Airbnb a Strata Property in Australia?
•   What Are the Concerns with Airbnb in Strata?
•   Local Government Laws (SA) for Short Term Stays
•   Can Your Strata Stop You from Airbnb-ing Your Property?
•   Watergate vs Balcombe: Real-Life Case Example
•   Final Thoughts

So, Can You Airbnb a Strata Property in Australia?

In South Australia, this does depend on whether your property is governed by the Strata Titles Act (STA), or the Community Titles Act (CTA).  In general, if your building was built pre 1996 it will be under the STA, while if it was built after this time it will be under the CTA,

Under the STA, there is no restriction on short-term letting.

Under the CTA, a corporation may (but does not have to) create a by-law that prohibits or restricts short-term letting for periods of less than 2 months s37(2)(a).

What Are the Concerns with Airbnb in Strata

Some of the concerns raised with Airbnb are the additional wear and tear within the common building thanks to increased people traffic. This high turnover of people may lead to overcrowding, unruly behaviour, or excessive noise if guests do not respect the property.

With buildings such as hotels, where there is an expected high level of tourism, there may be different fire safety regulations. These will differ from residential buildings.

Also, issues with insurance may arise, as the building’s public liability insurance may not cover Airbnb guests. If it doesn’t, or the insurer denies a claim due to the nature of the rental being a short-term one, and this will breach the policy, then the other owners in the building have to share the costs of the damage.

Local Government Laws (SA) for Short-Term Stays

As it stands, there aren’t any laws to prohibit short-term stays in South Australia.  At state level, South Australian government hasn’t passed any laws that prevent people from using their property as an Airbnb.

However, at the local government level, you may need to apply for a house or multiple occupancy permit if you’re hosting more than five separate people in your Airbnb at any one time, but other than this, the council do not have any laws against the property being used as a short term let.

Can Your Strata Stop You from Airbnb-ing Your Property?

There has been plenty of debate on how much control strata by-laws can impose on strata property owners to limit or ban short-term letting.

You may come up against the most resistance at the Body Corporate level, as those who share your common property may not be pleased with holidaymakers and parties going on in the building. By-laws may be introduced to try and stop short-term leasing for this very reason.

New South Wales has created a law that allows body corporations to stop short-term leasing if the owner doesn’t live in the property or if they have a 75% vote in favour of stopping Airbnb activity. However, the NSW Civil and Administrative Tribunal (NCAT) has noted in previous cases that by-laws cannot be “harsh, unconscionable or oppressive” under Section 139(1) of the Strata Schemes Management Act. Section 139(2) states that “no by-law is capable of operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot”.  This means all cases are likely challenged on an individual basis.

In saying that, there are likely to be articles or by-laws that ensure that owners and tenants act in accordance with ‘neighbour-friendly’ principles.  As such it is very common for there to be articles or by-laws governing noise, garbage/mess, parking, pets etc which all owners and tenants (even short-stays) need to abide by.

Some strata and community corporations have passed articles or by-laws that allow owners to be fined if they (or their tenants/guests) breach these articles or by-laws.  In this way, although short-stays may not be banned in some properties, they can be regulated to ensure that they do not cause undue disturbance to others.

Watergate vs Balcombe: Real-Life Case Example

The case of Watergate vs Balcombe arose following a dispute between the Owners Corporation of Watergate (Watergate) and Paul Salter and Belinda Balcombe (Balcombe).

Salter and Balcombe own several apartments in the Watergate complex, which were regularly let out on Airbnb for short-term holiday lets or tenancy agreements that were under 30 days. However, Watergate encountered problems and complaints from permanent residents about occupants staying in these flats for short periods of time.  

Watergate took Balcombe to the Victorian Civil and Administrative Tribunal (VCAT), and in July 2016, the Supreme Court of Victoria considered whether short-term holiday lets were permitted in Owners Corporations. 

Watergate made the case that their by-laws did not allow short-term holiday lets under Rule 34, while Balcombe claimed they did not have this power under the Victorian Strata Legislation. VCAT agreed that Watergate did not hold the power to ban short-term holiday lets. Despite appealing to the Supreme Court of Victoria, the ruling against Watergate was upheld.

This case occurred in Victoria, and the position varies depending on the state.  Also the rules are continually changing to keep up with modern practices.

Final Thoughts

As it stands, the answer to whether or not you can AirBnB out your strata property in Adelaide or greater South Australia depends largely on whether it is a pre 1996 building or a post 1996 building. As you’re living in a shared property, it’s best to consult with your strata community and discuss with your body corporate manager on the best way to tackle this new way of letting out holiday properties. 

Looking to learn more about strata management and body corporate services in Adelaide? Let our experts at Strata Data assist you. Our team has all the skills and experience you would expect from a top-class strata management service.

Whether it’s compliance with all your legal requirements and property legislation or maintenance and repairs, we can assist you in keeping your body corporate running smoothly.