New Code of Conduct for Short-Term Rentals to Help Combat Hosts and Guests From Hell

04 NOV 2020

 

Background

The NSW Government have introduced strict new laws for short-term rental accommodation hosts, guests, letting agents and online booking platforms. The popularity of short-term rentals has increased in recent years and is now a $30 billion a year industry with online booking platforms such as Airbnb making it easier for letting agents and hosts to advertise and promote properties.

In response to the expansion of the short-term rental industry, the NSW Government recognised a need to provide a clear set of rules in order to protect the rights of hosts, guests and neighbours alike. As provided by the Better Regulation Minister Mr Kevin Anderson, the introduction of the new regulations are also part of the broader reform of the sector to crack down on the minority of guests who have been giving the sector a bad name. The NSW Government has recognised the importance of short-term rental accommodation for the economy, however, they also acknowledge that there can be amenity impacts on residential neighbours resulting from some short-term rental occupants.

The aim of the new regulations are to introduce a Mandatory Code of Conduct (‘Code’) for the industry which is set to commence on 18 December 2020 just in time for Christmas Holidays to crack down on “hosts and guests from hell”.

The key elements of the new framework include:

  • A state-wide planning framework to achieve consistency and certainty across local planning controls;
  • A code of conduct to apply to online accommodation platforms, letting agents, facilitators, hosts and guests;
  • Changes to strata laws to allow owners corporations to adopt by-laws that prohibit non-resident lot owners from offering short-term rentals; and
  • A mandatory short-term rental accommodation premises register to be administered by the Department of Planning, Industry and Environment.

Under the new Code, booking platforms and letting agents have an obligation to inform all participants of the booking service before, or at the time, the participant enters into a short-term rental arrangement of the code and the obligation of all participants to comply with the code. In addition, the booking platform must ensure that a copy of the Code of Conduct is available on their site.

The standards will be enforced by the NSW Fair Trading Commissioner who has the ability to take disciplinary action, including penalties and exclusion from the industry for repeat offenders.

New Obligations for Booking Platforms and Letting Agents

In the event that a booking platform or letting agent is made aware of a complaint of dispute concerning a host, guest of premises subject to a short-term rental arrangement, they must notify the host or guest of the dispute or complaint as soon as possible. There is also an obligation to take reasonable steps to ensure that the host or guest is aware of how to lodge a complaint.

From 1 June 2021, all booking platforms and letting agents must maintain the following:

  • a Premises Register; and
  • an Exclusion Register.

There is also a new record-keeping requirement providing that booking platforms and letting agents must maintain a record of the particulars of each transaction involving a short-term rental arrangement that is entered into using their services. The record must be kept for a period of three (3) years after the end of the occupancy period and in a readily producible form.

New Obligations for Hosts

Under the new Code, hosts have an obligation to act lawfully and must not engage in conduct relevant to their capacity as a host that contravenes any criminal law, planning laws or by-laws that may apply to the premises.

There is also a number of obligations to guests and others, including the following:

  • “A host must provide the short-term rental accommodation premisesin a state that is consistent with any representations made when advertising or listing the premises for rent or otherwise in communications made to guests”;
  • “A host must holdinsurance that covers their liability for third party injuries and death on the premises”;
  • “A host must be contactable within ordinary hours to manage guests, the premises, neighbourhood complaints and other issues”; and
  • “A host, or the host’s authorised representative, must be contactable outside ordinary hours to deal with emergencies”.

There is also a general obligation to provide guests with necessary contact details and a hard copy of the Code and any by-laws that apply to the premises.

Importantly, the Code provides a number of obligations on behalf of hosts to neighbours. To meet the obligation to neighbours, hosts must take reasonable steps to ensure guests comply with the code and must inform any neighbours that they are offering short-term rental arrangements at the premises and provide their contact details.

Hosts also have the same obligation as booking platforms and letting agents to maintain a premises register and exclusion register, any failure to do so will constitute an offence under the Code.

New Obligations for Guests

Similarly to the obligations on hosts, guests must not engage in conduct that contravenes any criminal law, planning laws, by-laws or the terms of the short-term rental arrangement for the premises.

Under the new Code, guests must not:

  • Create noise that is “likely to harm, offend, or unreasonably interfere with the peace and comfort of neighbours and other occupants”;
  • “Act in a violent or threatening manner towards neighbours or other occupants”;
  • “Act in a manner that couldreasonably be expected to cause alarm or distress”;
  • “Use of enjoy the premises in a manner, or for a purpose, that interferes unreasonably with the use or enjoyment of common property”;
  • “Intentionally, recklessly or negligent cause damage to premises, common property or other communal facilities”;
  • “Intentionally, recklessly or negligently damage the personal property of neighbours of the premises”.

Guests will also have an obligation to take “reasonable care” of the hosts premises and property. In the event that a guest has a complaint or dispute, they must notify the host as soon as possible after the dispute or complaint arises.

Any guests who have been recorded on an exclusion register will be prohibited from entering into any short-term rental arrangements as a guest.

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