Airbnb is a notoriously popular accommodation sharing platform. Unfortunately, councils have been slow to adjust legislation and regulations to accommodate for these sharing platforms. Consequently, most people hosting on Airbnb and offering their homes online for rental are likely, and unknowingly, acting illegally.

1. What’s the Law on Short-Term Rental Accommodation in NSW?

Local councils regulate the type of developments allowed in a particular location. Councils will often divide their land into zones, and zoning determines what developers can create in those areas.

So, whether or not it is legal for you to offer your home on Airbnb depends upon your local council. Each council has a different policy regarding short-term rental accommodation. For example, Gosford Council has allowed people to offer accommodation subject to particular conditions. However, the City of Sydney Council and Randwick Council are both actively managing their respective areas to ensure that all Airbnb hosts have council approval.

Recently in Dobrohotoff v Bennic [2013] NSWLEC 61, the Land and Environment Court found that any offering of short-term rental accommodation was illegal without the council’s prior approval. The property in question was in a zone marked only for residential dwellings. Justice Pepper held that short-term rental accommodation for tourists and holiday trips were not a use permitted within these areas. The decision meant that all other councils with similar Local Environment Plans will also consider short-term rental accommodation in prohibited zones illegal.

2. When Ignorance Isn’t Bliss: Know the Law!

Airbnb states that it is your responsibility to understand how the laws in your city can affect you hosting on their website. Airbnb are aware that some countries or cities around the world ban their services, or hosts must get a permit or registration to offer short-term accommodation. So, if you are fined or penalised for illegally offering short-term rental accommodation on Airbnb, you cannot go to Airbnb trying to recoup the amount of the fine.

3. I Want In. How Can I Legally Host an Airbnb?

First, you must always check the guidelines and laws of your local council. Each council will have a different Local Environmental Plan with varying conditions and depending on the zone that your accommodation falls within, you may or may not be allowed to offer short-term rental accommodation.

If you have a mortgage, look at the terms of your contract. Sometimes mortgagors do not permit the property to be rented.

Lastly, you should always check with your insurance provider. While Airbnb now automatically covers you for up to $1,000,000 for property damage, you should update your Home and Contents Insurance Policy about any changes in your circumstances as it is most likely a term of your contract.

4. What’s the Future Look Like For Airbnb Hosts?

After the Court’s decision in Dobrohotoff v Bennic, several councils responded by updating their guidelines and rules to expressly permit short-term rental accommodation in certain zones, allowing for hosts of sharing platforms to rent their properties. Gosford, Pittwater, Shoalhaven and Kiama councils have all given approval for hosts to post accommodation online for short-term rentals. However, there are varying conditions that you should know before participating in accommodation sharing platforms.

While the future looks hopeful to more easily list your accommodation on Airbnb, for the time being you will have to rely on the current laws and regulations of your local council.

5. What Does This Mean For You?

The key takeaway is that you read and understand your council’s local laws on short-term rental accommodation. And if you don’t understand the regulations, make sure that you ask – ignorance of the law is no excuse for failing to comply!

Lachlan McKnight

Next Steps

If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.