Beware The B&B Nightmare
If you want to rent out your property to short-term holiday makers, as a bed and breakfast for overnighters or rent out a room to backpackers you just might be heading for a nightmare clash with your local council.
The Sydney Morning Herald reports some property owners are being threatened with fines of more than a million dollars for renting out rooms in their homes without having consulted council.
Some room renters are being ordered by councils to apply to become official bed and breakfasts. But the B&B application process could involve having to make expensive upgrades to your home such as fitting commercial kitchens and extra bathrooms.
It centres on council planning controls. It would be wise to get legal advise about controls in your particular area before you embark on renting out rooms to travellers. This is particularly worthwhile if you are using short-term accommodation websites such as Airbnb and Stayz.com as councils are also checking them to see who’s doing what in their council area.
Another serious legal problem has emerged for people renting out investment properties for short-term holidaymakers. Renting a house near a beach or park for a weekend or longer has been a holiday tradition for generations of Australians. It’s been a common way for investment property owners to make some money while they don’t live in the property themselves. It brought in much needed income for businesses in coastal towns.
However complaints from a neighbour about loud parties in a six bedroom holiday home in Terrigal led to action in the Land and Environment Court that has thrown this tradition into legal uncertainty. At the centre of the legal argument is what constitutes a “dwelling house” if no one lives there longer than a week. The owner tried to satisfy the neighbours by banning loud parties. However the judge ruled in favour of the neighbours, finding letting a dwelling house that is used primarily for short-term holiday rentals may require development consent under the Environment Planning and Assessment Act 1979.
People who rent out their property for short-term holiday rentals would be wise to get legal advice about whether they are on secure ground. Many councils are allowing holiday rentals in residential areas as it is a valuable part of the local economy. But some councils are mindful of community concerns about noise and are clamping down on the sort of activities that take place in a short-term holiday rental.
The Department of Fair Trading has introduced a voluntary Code of Conduct to promote standards for owners and guests to stave off unpleasant neighbor disputes over noise.