Short-term holiday letting has become big business over the last decade, with the rise of sites such as AirBnB.
For hosts, it’s a great way to earn some extra money on an investment property, or even their primary residence. For guests, it’s often a cheaper and more exciting way to holiday.
The rise of short-term rental accommodation (STRA) also provides a great tourism boost to local communities, as well as a nice injection to the Australian economy. In 2016, the STRA industry was estimated to be worth $31.3 billion, approximately 50% of that figure was made in New South Wales.
Unfortunately, it also comes with a series of downsides. Neighbours being impacted by noisy or rude guests, owners not being aware their properties are being sublet and their property and common property being damaged by unruly visitors.
“For too long this industry has gone without regulation,” says REINSW CEO Tim McKibbin.
“There needs to be strong operational guidelines for an industry of this size. Currently, the lack of policy around short-term letting is leaving everyone exposed.”
In 2018, the NSW Government passed the first piece of legislation for STRA on the back of a Parliamentary Inquiry. While the measures are a step in the right direction, REINSW has launched a response to the draft regulation that was recently issued for public consultation.
Among the submissions made to the Government, REINSW is calling for Government run registers to be implemented.
“In order for the new STRA reforms to work as the Government intends, there needs to be a Guest Register and Host Register established in addition to the Property Register and Exclusion Register,” said McKibbin.
“Booking platforms must require hosts to include their registration numbers as a mandatory field when listing properties.
“If online booking platforms adhere to the registration system, hosts will have to comply, as they wouldn’t be able to list their property without having a registration number.
“The registers will also show whether a strike has been recorded against the host or guest, or whether the host or guest has been recorded on the exclusion register. This will leave consumers better informed.”
KEY TAKEOUT’S FROM THE REINSW SUBMISSION:
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Draft requirements would make it mandatory for smoke alarms to be put in every bedroom of a STRA dwelling. REINSW has recommended against this, and for requirements to instead be consistent with residential properties used for private longer-term rentals
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Under the changes the host would be responsible for “damage to or loss of a guest’s or visitor’s property”, this differs from hotels where the responsibility for damaged or lost items is on the guest and from private residential tenancy arrangements where the responsibility is on tenants. REINSW argues whoever is responsible for loss or damage of items should bear the cost
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REINSW has argued strata insurance must be mandatory to protect the owners corporation against losses caused by STRA activities (regardless of whether the lot owner consented to such activities)
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REINSW recommends the draft Code of Conduct make it mandatory for owners to take out landlords insurance
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REINSW recommends hosts should be required to provide relevant information to the owners corporation and occupants, before guests arrive at their property
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REINSW recommends any host wishing to list their property for STRA should be required to sign up to a Property Register and obtain a registration number after proving their identity, as well as their ownership of the property or right to sublease
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REINSW submits booking platforms should require this registration number, before a host can list their property
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REINSW recommends potential guests must also sign up to a register and provide necessary documents of identification
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REINSW submits both hosts/guests have access to the registers to see whether a host/guest has a strike against them, or if they are listed on the exclusion register
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REINSW submits the government should run and oversee these registers in order to protect privacy and ensure compliance
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REINSW recommends hosts be given a rectification period, before a strike is recorded against them
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REINSW suggests the host register must include a list of all appropriate insurances, the principal contact for the host and any building emergency contact numbers
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REINSW suggests hosts should be required to provide their tax file numbers in the register, to encourage them to declare the income
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REINSW recommends a mandatory statutory review of legislative reforms every three years since they are ground-breaking and new to the industry