Uncertainty around short term letting

27 June 2018

For a variety of reasons we have in recent months fielded many enquiries about short term lettings. Some clients have wanted to prevent Airbnb, some have wanted to stop long term residential usage of motel approved units and some have wanted to start a short term letting operation in a permanent residential building.

We hear all sorts of reasons why short term lettings should be banned or allowed – it does or does not comply with the by-laws, my neighbouring building does it so I must be able to or my building is class 3 which precludes long term usage.

I thought it might be useful to set out some basic principles that govern this vexed issue:

1.  The class of the building is irrelevant. A class 2 building and a class 3 building can both be used for either short or long term residential use.

2.  The first place to start looking is the planning or development approvals for the complex. That will tell you which use is lawful and which is not.

3.  A planning approval can be changed to allow for other residential uses. That works both ways – a short term approval can be changed to allow for long term or both short and long term. Likewise a long term approval can be changed to allow for short term or both short and long term.

4.  Changing an approval might be very easy or it could be quite difficult – that depends on the planning scheme and how that impacts on the complex. Town planning advice should be sought.

5.  You do not have to change the use of all units in the complex. The consent of the owners of the units for which the use is proposed to be changes will be required.

6.  Sometimes the consent of the body corporate will be required to an application to change a planning approval. Advice should be sought about the particular circumstances.

7.  In Queensland if a building can be used for any sort of residential purpose (short or long term), a by-law cannot limit the type of residential use to which units can be put.

8.  However a by-law can impose a condition that a unit cannot be used for any unlawful purpose which indirectly could preclude a unit being used for short term lettings if that is not lawful. Such a by-law could be enforced.

9.  A letting agreement with the resident manager can lawfully impose a restriction on the manager letting out units for certain periods of time.

10.  Short term lettings are also regulated by the managed investment provisions of the Corporations Act and specific advice should be sought about the implications and requirements of that if you are proposing to move into short term letting.

These principles are a general guide only and as always advice tailored to the individual circumstances should be obtained.