Holiday letting register – new rules need real teeth

Last Wednesday (September 11) saw the closing date for submissons to Planning NSW regarding the propsed Code of Coduct, Holiday Letting Register and Fire Safety Regulations for short-term holiday lets.  Even though the topic has becoming as frustrating, infuriating and, let’s face it, boring as Brexit, I could not let it pass.  Here are my thoughts, presented in the full knowledge that they will make zero difference to the final outcome, but at least the politicians and civil servants can’t say they weren’t warned:

Both the proposed Code of Conduct and the Registry of STRA (holiday letting) premises are essential steps in allowing apartment owners and renters to regain some control over their homes.

The cavalier way in which the concept of genuine shared ownership (through such mechanisms as strata schemes) has been allowed to be undermined and damaged by entirely fake “sharing” in the commercial exploitation of empty homes, will some day be seen as the betrayal of whole communities that it is.

All the more shameful is the fact that this was perpetrated to allow a minority of individuals and one or two multinational corporations to make (literally) untold profits at the expense of people who believed they were buying and renting homes, not rooms in de facto hotels.

Meanwhile, the proven, fundamental dishonesty at the heart of the “home sharing” business is the only justification that the government needs for making the new regulations as tight and enforceable as required to restore some sanity to the sector.

Dishonesty? We are dealing with companies and individuals who use the flag of convenience of personal privacy to mask their true nature.

The great fiction that some online agencies are all about individuals letting rooms in their homes to impoverished visitors has been exploded time and again, yet it goes unchallenged by our lawmakers.

In short, we are dealing with entities that have shown themselves to be neither entirely honest nor transparent in their activities.  They ignore proof that their hosts flout planning laws and strata by-laws, refusing to de-list them, despite claiming they require hosts to obey local laws.

These same agencies now expect us to believe that they should police themselves.

Based on their misleading publicity campaigns, their misrepresentation of statistics, their selective reporting and their failure to reveal the true extent and nature of their businesses, they cannot be trusted.

The same applies to many of their hosts, many of whom for the past few years have knowingly flouted local council zoning and strata by-laws for their own profits. And perhaps both the agencies and their clients can start paying tax on those profits.

The proposed code of conduct and register should be allowed restore a level of honesty and decency to the holiday letting scene, especially in regard to apartment blocks.  But that will only happen provided they are given teeth.

This is not about punishing genuine home-sharers. It’s about deterring those who would break the rules in pursuit of profits, and that will require meaningful penalties and simple mechanisms by which the culprits can be exposed.

The registry should be a simple system, paid for via a fee to an independent, possibly commercial agency, which would provide two unique serial numbers – one for the host and one for the property.

Agencies that listed properties without having both serial numbers would be in breach.  Proven breaches of the Code of Conduct would result in fines (as outlined) while the serial numbers would be blacklisted.

Further finessing of the rules could include:

1. Any breach of the Code of Conduct or failure to register should result in immediate, if temporary, suspension by the apartment and the host from all online agencies until the matter is resolved by an independent tribunal such as NCAT.
2. Owners Corporations should be allowed to charge illegal or unregistered holiday let “hosts” the full costs of investigations and tribunal actions, should it be proved they were operating illegally.
3. Illegal or unregistered holiday let hosts should be required to compensate owners’ corporations by the amount they earned while they were operating illegally.
4. NCAT should be able to issue enforceable orders allowing officers and agents of the owners corporation, as well as fire safety officers, to enter apartments that they have good reason to believe are being used for illegal or unregistered short-term holiday lets, to check and gather evidence.
5. Owners and tenants of apartment who have been proved to be in breach of the code of conduct or the rules of the register, should have to inform any other strata scheme where they own or rent homes, that they have a history of ignoring or flouting the law.
6. All holiday let strata apartments should carry a 10 per cent additional fee on their levies to compensate for additional wear and tear of common property, use of facilities, additional administration costs and disruption.
7. From Day 1 of the new legislation, apartment blocks that have been given planning approval on the basis that they were not for holiday letting, should have, by default, a new by-law that reflects that status. This would protect owners who bought in on that basis. The owners corporation can remove or change the by-law by normal processes later, if they wish.

As a final observation, it’s all very well for people to be excited and enthused by “disruptive” entrepreneurs.  But this is an opportunity to assess who and what is being disrupted.

This is not just about noisy parties – far from it.  One of the main reasons people choose to live in apartment blocks is for personal security.  That is severely diminished when you don’t know who your neighbours will be from one weekend to the next.

The whole strata system is based on all owners paying a fair share for the use of common property. That is disrupted by unfair “sharing” with paying guests and long-term tenants are having to compete with tourists if they want to stay in areas that they may have called home for decades.

It’s time we stopped encouraging disruption for its own sake.

This is an opportunity to apply logic and fairness to the situation before we end up worse off than the cities around the world that have already been gutted by holiday lets.