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Owners’ Corporation Law - November 2014

30 Oct 2014

Short-term stay solution

San Francisco’s Air BnB law ought to be considered by lawmakers here.

In San Francisco, the city passed a new ordinance into law in October to better regulate the renting out of rooms and apartment dwellings to short-term stay travellers and tourists.

It had always been unlawful in many US cities – including San Francisco and New York – for landlords and lessees to let their apartments out for periods of less than 30 days to any one person or group of persons.

Under the proposed new ordinance in San Francisco it will still be unlawful for landlords and lessees to let their apartments out for less than 30 days. However  the new ordinance provides the flexibility for people to rent their dwellings out through sites such as Air BnB for three months in any given year.

In addition, the landlords and lessees must register with the city, and sign a declaration under threat of perjury to comply with the limits imposed under the ordinance. Ultimately, the owners must also pay commercial rates or “hotel” rates on the dwellings during the short-term stays.

This is the type of law that should be welcomed to Australian shores and adopted by Australian lawmakers, particularly in Victoria.

Planning Minister Matthew Guy promised law reform in this area for Docklands 18 months ago, however no progress has been made with the ministry since then.

Consumer Affairs Victoria has an outstanding opportunity to legislate on the back of this precedent set in San Francisco, a move which has been welcomed by the short-term stay industry itself, Air BnB included.

A 30-day minimum stay rule ought to be imposed on all dwellings in the metropolitan areas, and the local councils would benefit from increased rate revenue from the commercial rates imposed on those who would seek to short-term let their apartments.

The issue of short-term stays currently divides the city, and the issue is crying out to be resolved by clear and unambiguous legislation. The current practice of leaving owners’ corporations to litigate in the courts and tribunals is cumbersome and expensive for all concerned, and it ought to cease.

There exists an opportunity to strike a legislative balance between the rights to enjoy one’s own property in quiet peace and enjoyment versus the right to lease and let one’s own property to others with reasonable flexibility.

San Francisco has got it right. It’s time for Melbourne to follow suit.

Tom Bacon is the principal lawyer of Strata Title Lawyers.
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