Can Your Strata Building Ban Airbnb?

Why does the host’s home matter?

Section 137A of the Strata Schemes Management Act 2015 gives an owners corporation a particular power: by special resolution, it may adopt a by-law prohibiting short-term rental accommodation where the lot is not the principal place of residence of the person granting the right to occupy it.

The statutory test concerns the person granting the right to occupy the lot, who is not necessarily its registered owner.

The section also sets a limit. A by-law has no effect to the extent that it purports to prohibit that short-term letting where the lot is that person’s principal place of residence.

NSW guidance explains that this protection can apply while the person is temporarily away. An absent host does not automatically mean the apartment has stopped being their principal residence. Establish the facts; avoid treating an advertisement or an unfamiliar face as the complete answer.

Two fictional examples

The resident’s home: A person normally lives in the apartment and offers it for a short stay while away. That temporary absence alone does not remove the principal-residence protection. Planning, registration and conduct rules still need checking.

A separate investment apartment: The person offering the apartment lives elsewhere, and this lot is not their principal residence. The owners corporation may be able to prohibit its use for short-term rental accommodation through a valid by-law adopted and recorded through the correct process.

Who can make the restriction?

The committee cannot create this restriction simply by deciding it at a committee meeting. Section 137A requires an owners corporation special resolution at a general meeting. Under the Act’s voting test, no more than 25% of the value of votes cast may be against the resolution; value is calculated by unit entitlement. It is not simply a headcount of all owners.

A properly drafted by-law must stay within the statutory power and other limits on by-laws. Section 141 requires the owners corporation to lodge the required notice within six months of the special resolution. The change has no effect until the notice has been lodged and the Registrar-General has recorded it. Obtain advice on wording and registration rather than copying another building’s rule without checking it.

Planning and registration are separate checks

The strata by-law question does not replace planning requirements. Check whether the premises and proposed use qualify under the applicable planning framework, any location-specific limits, the NSW short-term rental accommodation register and fire-safety requirements. Hosts and guests also have obligations under the mandatory Code of Conduct. Ask for relevant registration evidence where appropriate; the register is not a general public search of host or premises details.

Planning guidance distinguishes hosted accommodation, where the host resides at the premises during the stay, from non-hosted accommodation, where they do not. That distinction is different from the principal-residence test in section 137A. A principal residence can be used for a non-hosted stay while its resident is away.

Do not assume a registration number overrides a valid strata restriction, or that the absence of a strata ban settles every planning question. Check exempt-development eligibility and any relevant consent conditions with the local council where needed. Plan a fair transition for existing bookings when considering a new restriction.

What if the problem is noise or behaviour?

Identify the conduct that is actually causing concern. Noise, obstruction or other behaviour may engage an applicable registered by-law, the statutory nuisance provisions or the Code of Conduct. A lawful short-term letting arrangement does not excuse misconduct. Equally, the fact of short-term letting does not automatically establish a breach or nuisance.

Good practice is to record dates, times and the nature of the alleged conduct, check the relevant rule and give the affected person an opportunity to respond. Use the correct authority and enforcement pathway. Planning and fire-safety concerns may need the council; Code complaints may need Fair Trading. A strata by-law complaint needs the scheme’s proper decision-making process. Avoid replacing an investigation into a particular incident with an unsupported building-wide ban.

A committee’s decision guide

• What use is taking place? Confirm the arrangement and the relevant premises rather than relying on assumptions.
• Whose principal residence is it? Check the position of the person granting occupation. Temporary absence alone does not settle it.
• What is already registered? Obtain the scheme’s current by-laws and any relevant approval history.
• What other requirements apply? Check planning eligibility, location-specific limits, registration, fire safety and the Code.
• What problem are we solving? Separate a proposed restriction on use from a complaint about particular conduct.
• Who has authority? A new section 137A restriction needs the owners corporation’s special resolution, timely lodgment and recording. Seek appropriate advice on wording, transition and process.