31 May 2017

Can you stop your Canberra neighbour hosting Airbnb? 

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A few weeks ago I got a letter from my Body Corporate saying that the recent Body Corporate meeting had decided that no-one in our complex of 15 units could host Airbnb.

I don’t rent out rooms via Airbnb, but I had contemplated doing it one day. As an owner occupier, I am upset that there are restrictions placed on who could stay in my home if I did want to do it. Why can’t I decide who stays in my unit and when?

From my perspective, I can’t see what the difference is between this and having a flatmate, especially as a flatmate would probably use up even more space in the garage downstairs and maybe contribute more to the communal garbage bin.

Or how is it different to having my Dad stay with me when he comes up to visit his grandkids? Or even inviting a man back to my bachelorette pad with romantic intentions? I am not one to invite in ‘just-met’ Tinder hookups, but people do and how is that more secure than Airbnb?

I had noticed over Easter that one of my neighbours had rented his unit out on Airbnb. He has come to Canberra for work but his wife still lives in Sydney, so he goes back often and rents out his unit when he is not here.

“Airbnb makes it affordable for me to go and see my wife while paying down my home mortgage in Sydney,” he said. He must be doing his hosting well because he has been awarded Superhost status.

I haven’t had much to do with his guests as they have kept to themselves but, on the odd occasion I’ve met them on the stairwell, they have seemed nice enough – pleasant, polite and quiet. Most were middle-aged couples, another time there was a father and his teenage son.

“Often my guests are here because they have business in Canberra, or they are visiting a child studying at ANU,” said my neighbour. “All my guests that stay have ratings so I can see that they have a history of doing the right thing. I have never had a problem with guests mistreating my place or stealing things.”

The motion went to the Body Corporate because one of my neighbours was disturbed about having Airbnb guests in the complex. I cornered her in the lift one day and asked her what her concern was. “I worry about security,” she said. “They have keys to the place, don’t they?”

The answer to that is yes and no. It is a secure complex, so an Airbnb guest would indeed need to have a remote to the garage and a key to get in the front door. But as all apartments have different keys, that is as far as anyone would get in terms of access. I see people I don’t recognise all the time – that is the reality in an apartment complex. Residents come and go, people have parties, boyfriends and girlfriends, and friends who visit.

I asked the body corporate for clarification about the decision, and that’s when I realised the situation in Canberra was very complex.

The body Corporate said its interpretation of relevant ACT Government legislation was that it was arguably illegal for residential properties to host Airbnb guests. It said it was concerned that if residents engaged in Airbnb, it was akin to running a commercial premise and this could be contrary to its insurance policy. In short, it felt that Airbnb was risky.

According to my solicitor, Ross Watch from Trinity Law (who is not a fan of Airbnb and doesn’t want any near him), several other apartment complexes (notably in Braddon) have decided to ban Airbnb. “It is arguable that, if a body corporate decided to uphold a ban strongly, it could go to the ACT Government and say that the owner is in breach of its land use for Crown lease purposes.” That is, your ownership of your property could potentially be rescinded if you dare to have some guests from Airbnb stay over the weekend because the law in the ACT does not support it.

Canberra is way behind other States and Territories in providing a clear policy response on Airbnb or similar accommodation sharing services. I searched the ACT Government website while researching this – I found nothing. I also sent a request for information several weeks ago – I heard nothing back. Yet the ACT Government is leading the way in other aspects of the gig economy (based on short-term tasks or engagements), notably being the first jurisdiction to legalise Uber.

Last year the Victorian Supreme Court heard a case where a body corporate was attempting to ban Airbnb. The decision upheld the idea that apartment dwellers could not prevent other landlords from listing a premise on Airbnb. Tasmania and South Australia also have legislation that allows for accommodation sharing.

But the situation where a tenant lists a property on Airbnb without the landlord’s consent is different – in the landmark ‘Airbnb’ case of Swan v Uecker the Victorian Supreme Court found that an Airbnb is akin to a lease, not a license, so if your rental agreement says you can’t sublet and your landlord doesn’t want you to have Airbnb guests, then you can’t.

Airbnb told me it encourages its hosts to think about their responsibilities including approvals before it creates a listing. It has also launched a Friendly Buildings Program to encourage conversation about respectful and responsible home sharing in strata buildings and to put in place settings to support that.

“We also hear from many hosts that the current laws governing home sharing are unclear and difficult to understand, and in some cases, they were written long before the internet even existed,” said Brent Thomas, Head of Public Policy Australia and New Zealand at Airbnb.

“There is a whole generation of Australians who will only be able to afford to live in strata buildings, but this should not lock them out of the share economy,” he said.

In the nation’s capital where there are not enough accommodation options to handle peak demand periods like Budget week, school holidays and Floriade, it makes sense to me that Canberra should promote accommodation sharing options.

According to the Deloitte Access Economics report Economic Effects of Airbnb in Australia, Airbnb guests are estimated to have spent $20.4 million while visiting the ACT in 2015-16, generating $12.6 million in value added to the ACT economy.

I have several friends who are Airbnb hosts in Canberra who report positive experiences in doing so. In some cases, it is helping people who would otherwise struggle financially – often single women or women who choose to stay home to be with their children. They tell me they enjoy welcoming guests to Canberra, and providing them with a positive local experience that they might not get in an impersonal motel room.

I worry that my friends face an uncertain future because the legal situation in the ACT is unclear. They deserve better – at least they should know if what they are doing is legal in the ACT or not. Come on ACT Government, get with the gig economy and come out with a clear policy stance on this issue.

Do you host Airbnb in Canberra, or do you know anyone who does? Would you stop your neighbour from hosting Airbnb guests?

Do you think that Airbnb and similar services are good for Canberra?

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If the host/owner stays whilst the AirBnB guest is there then I agree its no different to having anyone else stay for a few nights or short while. But if they rent the unit out entirely (eg as a business venture) and random people are constantly coming through then I think that does cross the line and neighbors are entitled to disapprove. Our body corporate has a ‘no leases shorter than 3 months’ rule as we don’t want to become a short term accommodation facility (or heaven forbid where people come and go like a hostel or boarding house, which will lower property values). So the AirBnB host person has to consider what it means for neighbours and others, not just their bank account.

A Nonny Mouse6:34 pm 01 Jun 17

Here are some of the enforceable default rules from the Unit Titles (Management) Act that might apply to both a tenant and the owner, separately and jointly:
5. Use of common property
A unit owner must not use the common property, or permit it to be used, to interfere unreasonably with the use and enjoyment of the common property by an owner, occupier or user of another unit.
7. Use of unit—nuisance or annoyance
(1) A unit owner must not use the unit, or permit it to be used, in a way that causes a nuisance or substantial annoyance to an owner, occupier or user of another unit.
(2) This rule does not apply to a use of a unit if the executive committee has given an owner, occupier or user of the unit written permission for that use.
(3) Permission may be given subject to stated conditions.
(4) Permission may be withdrawn by special resolution of the owners corporation.
8. Noise
(1) A unit owner must not make, or permit to be made, such a noise within the unit as might (in the circumstances) be reasonably likely to cause substantial annoyance to an owner, occupier or user of another unit.
(2) This rule does not apply to the making of a noise if the executive committee has given the person responsible for making the noise written permission to do so.
(3) Permission may be given subject to stated conditions.
(4) Permission may be withdrawn by special resolution of the owners corporation.
9. Illegal use of unit
A unit owner must not use the unit, or permit it to be used, to contravene a law in force in the ACT.

If the units are Strata Title I find it difficult that a Body Corporate stopping any short term rental of the unit owners property would seem dubious at least. If it is Company Title that is a different matter as you own shares in a company and you are allowed to use your unit by rule of the Company.
Many Strata Title units are rented both short and long term in Canberra and I don’t believe it is within the scope of the Body Corporate to stop it. Who is to say if you sell you are not selling to a person whose income is theft.
Bodies Corporate are limited in their control and powers over what unit owners can do within their units.
If there is trouble with tenants (or owners) there are legal processes in place and it not within the powers of Body Corporate to ban rentals because of something that may or may not happen.

A Nonny Mouse6:01 pm 01 Jun 17

A Nonny Mouse said :

A tenant, whether long or short stay, is held to be jointly and separately responsible for infringement of the OC rules.

That should be ‘A tenant and the owner are held jointly and separately responsible…’

A Nonny Mouse5:57 pm 01 Jun 17

I just commented on the proper way for an Owners Corp to pass a decision to ban AirBnB if it want too – an amendment to its rules by special resolution.
Flat-chat.com.au has a lot of discussion on this topic but it tends to be more NSW-centric.
I am in a large set of townhouses. One unit is on AirBnB and the owner is resident in another unit. This has caused no problems at all.

That said, it is worth noting that even without banning AirBnB the usual OC rules could be sufficient to deal with problems if they are recurrent. Most OCs have the default rules which deal with issues of noise and nuisance and unreasonable interference with reasonable use and enjoyment of common property. A tenant, whether long or short stay, is held to be jointly and separately responsible for infringement of the OC rules. So, the owner can be held responsible if AirBnB residents are regularly causing problems.
The next step would be to document the problem (if it exists) and request that the EC issues a rules infringement notice. It must contain various statements to be valid as set out in the Act, including that non-compliance is an offence and the matter can automatically proceed to the ACT Civil and Administrative Tribunal.

A Nonny Mouse5:39 pm 01 Jun 17

A few things are relevant here:
How did the Owners Corporation (OC) resolve to ban AirBnB? Was it the Executive Committee (EC) that made a decision or the OC? If it was the OC, how was the decision characterised? What class of resolution was passed?
If the EC decided it, I suggest it is advisory or a shot across the bow at most.
If the OC decided it, was it at a properly notified general meeting and was the motion notified to the owners? If the motion were just put from the floor of the meeting without notice then it is arguable that the meeting improperly went beyond the business that was notified for the meeting. IE You might have made a point of going to the meeting and voting and the outcome might have been different if you had known this was on the agenda.
If a general meeting of the OC decided it, did they put it as an ordinary resolution? If so, this is an unenforceable ‘house rule’ at best.
What the OC should have done, if it would be legal, is to put this as a motion for a ‘special resolution’, that is, a majority in favour and fewer than one third opposed of those taking part in the meeting, in person or by proxy (usually that means >2/3 in favour but could be less if some take part in the meeting but abstain on this vote). The special resolution would then be to adopt a new ‘Rule’ (previously known as ‘Articles’ or ‘by-laws’). A rule is then enforceable. It becomes, in effect, part of the Unit Titles (Management) Act 2011, albeit subordinate to any provision of that Act or any other law in force in the ACT.

wildturkeycanoe said :

Airbnb does not give other residents the peace of mind of having somebody to approach and complain to

That depends whether the owner lives in or not. I have stayed in four Airbnbs, and three of those the owner lived in. The fourth (an apartment) the owner used one of the bedrooms as an office during the day, so were often there. I have two Airbnbs booked at present, and the owner lives in in both of them. That’s why I asked about Land Tax when the owner lives in. Years ago it didn’t apply if you rented a room, but lived in and shared the rest of the house/flat with the tenant, but I wonder if that has changed.

Maya123 said :

I wonder how many are paying land tax to host a Airbnb. If that’s all the apartment is used for then they should be paying land tax, but does it also apply if only one room say is being rented and the owner also lives there?

That is a good point.

A current method of determining if properties are owner occupied is by ACT Revenue doing “data matching” with local electricity/gas suppliers to ensure that service is is the same name as the registered rate payer. If the property is let from time to time for short terms there is no point in changing the details to the occupier using electricity service so as long as the landlord says nothing to ACT revenue there is no way they will find out.

This creates an opportunity for “dob-ins” where the adjoining property is used for more than casual renting out an it is a nuisance. I am sure the imposition of land tax would deter a lot of people from becoming Airbnb landlords.

wildturkeycanoe5:50 am 31 May 17

That is the folly of living in a body corporate my friend, they hold all the aces. Your argument is like someone buying in a BC scenario, then complaining about not being able to put up an archway in front of your front door. You read the rules of the BC and by buying a unit there, you agree to those rules. No point arguing about it later on.
I do understand that this wasn’t a rule prior to your ownership of the unit, but were you present at the body corporate meeting to voice your opposition to it? If not, it’s like complaining about the present government but never bothering to vote.
There is one major difference between Airbnb and having visitors around, which is that the owner is not present. Airbnb does not give other residents the peace of mind of having somebody to approach and complain to if something happens while the non-regular visitors are there. There would be a sense that the owner has some level of control over the actions of their guests, such as supervising their entry to common areas such as carparks and pools. This is an obvious security issue with unfamiliar strangers being handed keys. Any incidents can be taken up with the owner, but with Airbnb neither the body corporate or the neighbors have a clue who to talk to about damage to property, theft, noise or other common complaints.
Would an owner be obliged to give names, phone numbers and other private details to the BC if they take in guests while they are away?
As mentioned also, the insurance aspect of things is likely to be complicated, just as most things are in Canberra thanks to the nanny state mindset and endless rules lorded over us.

I wonder how many are paying land tax to host a Airbnb. If that’s all the apartment is used for then they should be paying land tax, but does it also apply if only one room say is being rented and the owner also lives there?

Southerly_views11:34 pm 30 May 17

We have stayed in many Airbnb properties with mixed results (despite adequate research beforehand) both in Australia and overseas. This includes several refunds from Airbnb for problem stays + one that was subsequently delisted. We too have a good rating from every host except for one of the refunds. The majority of hosts do not live in the local area and most own several Airbnb properties (often in the same building). The hosts usually engage agents or friends to meet & greet so we only ever meet the host on about 20% of stays.

While one or two properties in a complex rented out under the Airbnb banner may not be troublesome, what happens when the there are 3 or 4+ units being rented out for short stay guests including the inevitable occasional troublemakers. Body corporates are simply trying to reduce the likelihood of increasing problems as more and more unit owners seek the significantly higher monetary returns that can be achieved by Airbnb rentals, especially in popular locations. Short term Airbnb rates often exceed long term residential lease rents by a factor of two or three times depending on the desirability of the property.

While there are certainly some benefits associated with staying at Airbnb’s our family is now moving away from using Airbnb and back into hotels. This is partly due to our mixed experiences and more than ever the rising Airbnb prices (frequently per head rather than per property) along with the new “Uber style” demand pricing strategy. In addition, hotels generally do not require up-front payment months in advance, are hassle free for check-in, check-out or cancellations and are full service without extra cleaning charges, minimum stays etc.

peturbed_but_pretty9:57 pm 30 May 17

I live in a small complex of four flats, and for the past 7-8 months the one above me has been let full-time as an Airbnb. It’s not as bad now that it’s colder, but in summer I would come home every day to different people upstairs, on the balcony which has a clear view of my courtyard. We are literally about 3 meters away from each other. I hated it. I still do. It’s different if you know the people, and you have a neighbourly relationship with them, but it is horrible having to deal with new people every day or second day, in your own haven.

Maryann Mussared5:02 pm 30 May 17

I regularly use airbnb overseas and have a good rating. My rating was assessed by providing my passport and drivers license details to airbnb, and both the airbnb landlord and the airbnb guest are encouraged to rate each other at the conclusion of the stay. So I would have to say I think – overall – it is a good idea. However, I have heard local horror stories of airbnb guests misusing common property, such as swimming pools and communal rooftop gardens to view fireworks.

Serina Bird Huang (aka Ms Frugal Ears)12:13 pm 30 May 17

I am not a lawyer so I am not best placed to comment on the legal situation in the ACT. It is complicated in the ACT by the fact that we have Crown leases rather than freehold, and these often I believe have stipulations for the purpose on which the property can be used. But yes, the distinction between a landlord leasing out, a person having a housemate (short or long term) or Airbnb seems to be a fine one. Hopefully someone who is a conveyancing lawyer with Canberra experience can comment further.

The article talks about apartment buildings, yet the legal advice quoted appears to relate to all properties in the ACT. I live in a typical townhouse development in which about half of the properties are rented. Is this also unlawful? And, if a Airbnb agreement is a lease, then what is wrong with a lease for two or three days?

The ACT government was a “gig” leader with the Westside pop-up container village too.

What a resounding success that was.

And the difference between an Airbnb guest and a flatmate is control.

As a landlord I am bemused. I already let out my properties for commercial gain. Perhaps the insurance distinction is between long term leases and hotel-like short term stays.

If the concern was raised in the grounds of insurance, I would want to see the difference between the normal insurance and the one that covers short-term leases, noting that the body corporate is only responsible for structures and shared assets, not fixtures.

If the BC can not show a financial reason for the decision, they should not propose the rule change. Supposition and fear mongering are for tabloids and clickbait news sites, not sensible bodies corporate.

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