Providing an online platform for short-term rental accommodations involves various legal considerations. Before you launch your business, understand which regulations exist and how to comply with them. Ultimately, you want to protect the interests of hosts, guests and your business. This article outlines the key legal considerations to be aware of as a business providing an online platform for short-term rental accommodation.
What is Short-Term Rental Accommodation?
Short-term accommodation refers to lodging options rented out for shorter durations, typically ranging from a few nights to a few weeks and generally for people on holiday. Some examples of short-term rental accommodation you might be familiar with include AirBnB and Stayz.
Short-term rental accommodation does not include an arrangement under a residential tenancy agreement or any other arrangement in which a person uses a premises for ongoing accommodation. If you offer ongoing accommodation, you should do so under a residential tenancy agreement.
Regulations for Short-Term Rental Agreements
Depending on where you are operating, you may have requirements to comply with various state and territory regulations.
For example, if you operate in New South Wales, you must comply with the mandatory Code of Conduct for the short-term rental accommodation industry (Code). The Code covers the following:
- obligations of booking platform providers;
- record-keeping requirements;
- how to handle complaints or disputes; and
- mandatory information that you must provide to guests.
Similarly, in Tasmania, a short-term rental accommodation provider must comply with the Short Stay Accommodation Act (2019) (SSA). Under the SSA, you must display the relevant permit details of each premises on your platform. You also have reporting obligations to the Director of Building Control at the end of each financial quarter.
Note that if your platform is available Australia-wide, you must comply with all the various state and territory legislation and regulations. Certain areas, such as Byron Bay and Noosa, have strict regulations on short-term accommodation. Likewise, the rules can change from suburb to suburb. Under the various legislation, breaches of the regulations can attract penalties. You should seek advice from a lawyer to understand your obligations in each jurisdiction.
Continue reading this article below the formAgreements and Policies
Your platform should have clear agreements for both guests and hosts, detailing their responsibilities, rights and liabilities. This can include, among other things, property damage, guest behaviour, cancellations and refunds. Your agreements should also clearly state your service fees and how payments will be made, including any fees or commissions you charge hosts or guests.
You should also consider including a privacy policy on your platform that clearly explains how you collect, store and use guest information in line with your obligations under privacy legislation. Be mindful that you have obligations to ensure the security of the information that you collect and to protect it from unauthorised access or use.
Reviews
Consider whether guests and hosts will have the ability to review each other on your platform. If so, you should establish guidelines for such reviews and consider how you will handle negative reviews. For example, will a user be prevented from using your platform if they receive a certain number of negative reviews? You should clearly outline what process your business will follow in your policy.
Payments
If you are integrating a third-party payment processor on your platform (such as Stripe), you should implement secure and compliant payment processing methods. You should also inform users that a third-party payment processor will be used on your platform.
Importantly, if you are receiving money on behalf of the host, you may be required to comply with additional legislation (including real estate agent legislation) depending on the jurisdiction. In these cases, you may be required to hold funds in a separate trust account in addition to other obligations.
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Key Takeaways
When operating an online platform for short-term rental accommodations, it is essential to ensure compliance with your legal obligations and to protect the interests of hosts, guests and your business. Your platform should feature clear agreements and policies for guests and hosts to avoid disputes, and depending on the jurisdiction(s) you are operating in, you must ensure adherence to jurisdiction-specific obligations, particularly when handling money on behalf of hosts. Failure to comply may result in penalties.
If you require assistance understanding your obligations, our experienced e-commerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on [nuber] or visit our membership page.
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