The NSW Government has implemented a new statewide regulatory framework for short-term rental accommodation (STRA). The new laws impose new obligations on booking platforms, hosts, letting agents and guests to register their properties that are used for STRA purposes and to ensure that their properties are compliant with the fire safety regulations.
Changes to the SEPP
The State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP) now includes a provision that development for the purposes of hosted STRA is exempt development for the purposes of the SEPP if the hosted STRA meets certain requirements. This means that if your hosted STRA meets certain requirements about its location and the amount of days it is used for non-hosted STRA, you will not need development consent to use the property as a hosted STRA.
If your property does not meet the requirements for exempt development as contained in the SEPP, it is your responsibility to ensure that the use of the property as STRA is a permissible use under the Environmental Planning & Assessment Act 1979 (EP&A Act).
If you require advice on whether your property is considered exempt development under the SEPP or whether it is permissible under the EP&A Act, please contact us.
Changes to the EP&A Regulation
The Environmental Planning & Assessment Regulation 2000 (EP&A Regulation) has been amended to include a requirement that STRA owners must verify that their property is compliant with fire safety standards. This verification requires owners to register their property as being used as STRA with the NSW Government. The EP&A Regulation prevents a property being used for the purposes of an STRA unless it complies with the fire safety standard requirements.
Properties used for the purposes of STRA must be registered as fire compliant by 1 March 2022.
As of 1 November 2021, all owners in New South Wales (with the single exception of Byron Bay Council Area), including existing premises with development consent, who wish to rent their property as an STRA host must register their property and pay the registration fee through the NSW Planning Portal. You will need to create a NSW Planning Portal account or log-in with your Service NSW account. The planning portal can be accessed at https://pp.planningportal.nsw.gov.au/stra.
The requirement for registration only applies to residential accommodations such as houses, units and terraces or parts of those residential accommodations that are being rented on a short-term basis (such as a room in a house). A caravan, tent or moveable dwelling does not need to be registered. STRA hosts are required to pay a registration fee of $65.00 for the first twelve months, and an annual review fee of $25.00.
Completed STRA registrations will be issued with an STRA Property ID number which is to be displayed on any property listing. Properties should not be advertised on a booking platform or through a letting agent until such time that the STRA Property ID number has been issued. Failure to display the STRA Property ID number is a breach of the Fair Trading Act 1987, and a civil penalty can be imposed.
Once the property has been registered, you will need to detail each of your STRA bookings through the NSW Planning Portal. This includes the start and end date of each booking.
These new STRA registration requirements follow the introduction of the mandatory code of conduct governing STRA rentals late last year. The code of conduct sets out the rights and obligations of STRA industry participants, provides for the resolution of disputes and complaints, outlines the compliance and enforcement approaches that applies to contraventions of the code and facilitates the oversight of the STRA industry generally. A copy of the code of conduct is available on Fair Trading’s website.
If your STRA property is contained within a strata scheme, now is the time to review your by-laws to ensure that your hosting is not in breach of any of the by-laws. Your by-laws may need to be reviewed to ensure they are adhering to the constantly evolving legislation.
STRA registration should be a relatively straightforward process, and you should immediately attend to registration to ensure that you can rent your accommodation out over the holiday break without being in breach of the new rules. You must make sure that verification of your property’s fire compliance is noted in the register prior to 1 March 2022.
The provisions of the new framework can be located in Part 3A of the State Environmental Planning Policy (Affordable Rental Housing) 2019, Part 9 Division 7D of the Environmental Planning & Assessment Regulation 2000, and the NSW Government factsheet titled “New rules for Short Term Rental Accommodation (STRA)”.
This article was co-written by Koreen Partridge, Associate.
This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice specific to your own situation. Please contact us if you require advice on matters covered by this article.