If you are in the accommodation industry and have not heard of Airbnb you must have been living under a rock.
The San Francisco-based home sharing juggernaut just keeps growing. It is affecting accommodation supply worldwide, but also in our little part of the planet.
An indication of how quickly Airbnb has arrived is reflected in the most recent BCCM review recommendations. We received the recommendations last month to an issues paper released in December 2014. The topic of short term letting restrictions would have been a perfect addition to that options paper, but Airbnb was simply not on the radar when it was published. This is yet another example of the pace at which technology is moving.
Disruption can mean many things, and there are always unintended consequences. If you are interested, have a look at this article from a tax perspective for property owners using Airbnb.
But back to our question.
What can a Queensland body corporate do about it?
We won’t keep you all in suspense. The answer is nothing.
For us, it all starts at a very macro level.
What right has a body corporate got to interfere with what goes on inside a lot?
One of the most misconstrued aspects of strata living is the ability of a body corporate to come inside people’s front doors and impose rules.
What matters for a body corporate should be:
- What happens on common property and parts of a lot the body corporate must maintain; and
- Conduct that interferes unreasonably with others in the scheme.
A body corporate has no ability to dictate what happens inside a lot outside those parameters.
This is supported by the BCCM Act which very simply provides at subsection 180(3) that if a lot may be used for residential purposes, the by-laws can not restrict the type of residential use to which it is put. And yes – that catches all of those ‘no lettings under three months’ and ‘no schoolies’ by-laws. These are simply unlawful and unenforceable.
Some jurisdictions allow that type of by-law. Queensland doesn’t.
The next issue then is conduct. If an occupier is causing such havoc that their conduct interferes unreasonably with the use and enjoyment of others, then there is a (long winded) process with respect to by-law enforcement that can be undertaken. The conduct obligations and enforcement process applies to everyone; owner occupiers, short term and long term tenants.
The other thing that people need to make careful note of is the level of conduct needs to interfere ‘unreasonably’ with others. “Reasonable” interference is therefore not something that is actionable. Community living involves compromise. There are going to be moments where your amenity is disturbed. This is no different to living in suburbia. It happens.
When we are advising on these styles of matters the issue is never the law. It is the burden of proof. Anyone alleging unreasonable interference needs to be able to make that out via evidence. A ‘he said, she said’ diatribe generally won’t cut it. The best example is always smoking.
That is all a body corporate can do if an occupier causes grief. It comes down to is conduct, not tenure of the occupant.
This leaves aside planning rules and permissions. Those are issues for the respective local authorities based on the approval they have given for the use of lots. Our experience is the approvals are usually pretty open and don’t restrict short term use, but that can vary from building to building. A body corporate cannot enforce the council’s requirements, but it can complain to council about the lack of compliance with the planning approval.
The building classification argument has been run and done too. It has been confirmed that there is nothing in the residential classes which preclude the short-term use of lots.
Them’s the breaks. If you want action, talk to your local councillor.
How about the insurance and public liability?
As a private owner in a group property( 100 rooms plus) and a paying body corporate fee member, why can’t my quests use the reception facilities .
A portion of my body corporate fees and used to pay for reception updates however my quests cannot use the reception services.
Is this common once you take your property out of their letting pool?
That is a fantastic question Tony, and it is a topic that we had Hynes Legal cover for us several years ago (I think the article may no longer be on the site though). Basically, the onsite manager has 2 different jobs which make up his business (If you check our site for management rights for sale, you’ll see we have 2 different income streams shown on each listing). One is the body corporate salary, the other is the income from his letting office (this is the net profit, less the salary). The body corporate salary, is the bit you pay him for, and it is a fixed income, determined by his caretaking agreement with the BC. It details very clearly, everything he is contractually required to do in return for that salary. It includes things like maintaining common areas, ensuring the building doesn’t fall down, vacuuming the hallways, trimming the hedges, keeping the pool running, etc. That’s his role as a caretaker. The other part of his business is a real estate agent. This involves him generating income by way of commission from properties he either rents or sells in the building. This part of his income is not fixed, it’s commission based, just like any other agent. You don’t *have* to pay him to manage your listing, you can live in it yourself (in most cases) or you can let it to another outside agent. You will find that this reception is typically part of his title, ie: he owns it exclusively, just like you own your lot, and he can use it to run his letting business from.
*IF* you *choose* to give him your management, then he’d likely be greeting your guests, at reception, etc. If you use a different manager, he has absolutely no obligation to provide any reception services to your guests whatsoever as it’s literally none of his business. Perhaps you could consider reaching out to him and asking if he’d be interested in making an arrangement with you? I know a lot of our managers actually help owners with their airbnbs, they let guests in, ensure linen and cleaning services are delivered, for a management fee. Something to consider perhaps?