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What is short-term rental accommodation?
Short-term rental accommodation is commonly associated with holiday letting. It usually involves renting out a home for a short period of time, and that home may also be used by the owners for their own accommodation.
The Government’s regulation of short-term rental accommodation is focused on commercial arrangements, where a person is given the right to live in a home for up to three months at a time.
Short-term rental accommodation laws don’t include residential tenancies and other traditional forms of short-term accommodation, such as hotels and motels.
Code of Conduct
A mandatory Code of Conduct for the Short-term Rental Accommodation Industry (Code) applies to all participants in the industry.
The Code applies minimum standards of behaviour and requirements on all participants.
Read more about who is regulated by these laws and their obligations:
The following accommodation arrangements are excluded from the Code of Conduct:
- tourist and visitor accommodation including backpackers’ accommodation, hotel or motel accommodation, and serviced apartments
- boarding houses
- holiday parks
- refuge and crisis accommodation
- disability accommodation, and residential tenancies.
How NSW short-term rental accommodation is regulated
Short-term rental accommodation is regulated through:
- a mandatory Code of Conduct that applies to all participants
- a state-wide planning framework and planning laws to consistently regulate the use of premises
- a mandatory short-term rental accommodation premises register where most hosts must register their properties, and
- strata scheme by-laws that restrict certain types of short-term rentals.
The Code creates new disciplinary actions that NSW Fair Trading can take, including:
- actions available for breaches of the Code, and
- the Exclusion Register.
Strata by-laws
Owners corporations can adopt by-laws restricting types of short-term rental accommodation within its strata scheme, but only in lots that are not the host's principal place of residence. This means if someone lives in a strata property as their principal place of residence, they will still be able to rent out their home, or certain rooms if they are temporarily away from home.
Owners corporations can introduce an occupancy limit of two adults per bedroom using a by-law. This could help manage any overcrowding concerns residents may have because of the short-term rental accommodation.
Before adopting a new by-law to limit short-term rental accommodation, owners corporations will need to work with owners and residents to manage the transition for any pre-existing rental bookings or guests staying in the building at the time of making the by-law. Alternatively, the by-law could state that it starts at a future date, to give lot owners and residents time to adjust.
Read more about Understanding strata by-laws or Changing strata by-laws on the NSW Government website.
Police & Local Council
The enforcement of planning laws (fire safety [including overcrowding], planning approvals, parking or ongoing noise) remains with Local Council, and criminal laws (urgent noise issues) remain with Police. The Code of Conduct does not change the existing complaint handling processes of Local Council and Police.
Who can lodge a complaint and how:
Hosts, guests, neighbours and owners corporations can make a complaint about an alleged breach of the Code to NSW Fair Trading.
If the property is part of a strata scheme
Breach of by-laws
Criminal activity or urgent noise complaints can be made to Police.
All other complaints relating to breach of by-laws such as damage to properties, ongoing noise, parking or use of the property are to be reported directly to the Owners Corporation/Strata Manager.
If the property is not part of a strata scheme
Ongoing noise, parking and planning
Matters should be raised with your local Council. Once complaints have been proven, an appropriate warning/prevention notice may be issued. If these are not complied with, the Council can notify NSW Fair Trading for further action under the Code of Conduct.
Criminal activity and urgent noise
Matters should be raised with NSW Police. Once complaints have been proven, appropriate warnings/penalties may be issued. If these are not complied with, the Police can notify NSW Fair Trading for further action under the Code of Conduct.
Cancellations, fees and charges, Code of Conduct breaches
For cancellations and fees & charges matters, please lodge a Product or Services complaint with NSW Fair Trading.
For all other Code of Conduct matters, you can lodge a Short-term rental accommodation complaint.
When to contact Fair Trading
Complaints about fees/charges and cancellations are covered under the Australian Consumer Law. You can lodge a Product or Services complaint.
If your complaint is about the Booking Platform, Letting Agents, Hosts (e.g. not supplying emergency information to guests or misrepresenting the property) or Guests (e.g. not taking reasonable care of the premises), you can lodge a short-term rental accommodation complaint.
Frequently asked questions
Is the Code of Conduct mandatory?
Yes. Compliance with the Code is mandatory for all participants of the short-term rental accommodation industry where the residential premises is in NSW.
Once a complaint has been lodged with Police or local council, what is the next step and what evidence is provided to NSW Fair Trading?
Contact your local council if you have an issue or complaint relating to fire safety (including overcrowding), planning approvals, parking or ongoing noise. You can contact the Police for urgent noise issues.
The Commissioner for Trading can issue a strike for deliberate and persistent breaches of these.
Where there has been a proven breach of other laws (for example enforcement action by local council, a finding in a court or tribunal), this evidence can be provided to NSW Fair Trading to help determine whether to issue a strike.
What is a short-term rental accommodation arrangement for the purposes of the Code of Conduct?
A short-term rental accommodation arrangement is a commercial arrangement that gives a person the right to occupy residential premises for a period of no more than 3 months at any one time.
Does ‘residential premises’ include part of the residential premises?
Yes. Residential premises includes either whole or part of a residential premises.
Where can hosts find an insurance provider to meet their insurance coverage requirements under the Code of Conduct?
Under the Code, hosts must hold insurance that covers their liability for third-party injuries and death.
Use the Insurance Council of Australia’s Find an Insurer service to find insurers that offer this coverage, or call 1300 884 934. Alternatively, you can contact insurance providers to discuss your options.
How can by-laws be used?
The model by-laws, if adopted, already include options to help owners corporations manage the impact of short-term rental accommodation in their strata scheme. The model by-laws require:
- residents wishing to change the use of their lot to provide short-term rental accommodation need to notify the owners corporation at least 21 days before the change happens
- owners or residents are not to park or stand any vehicle on common property, or permit a motor vehicle to be parked or stood on common property, except with the owners corporation’s written approval or as permitted by an authorised sign
- owners and residents need to get rid of garbage using the process set by the owners corporation
- owners, residents and their visitors are to be adequately clothed and not behave in a way that is likely to cause offence or embarrassment to other residents or to any person lawfully using common property, and
- an owner or resident must not obstruct people’s use of common property.
Owners corporations can choose to adopt the model by-laws with or without changes. They can also adopt their own unique by-laws, although there are restrictions on the types of by-laws owners corporations can adopt. For example, an owners corporation cannot adopt a by-law that is unjust or otherwise conflicts with strata or planning laws.
Does a person need a licence to operate a short-term rental premises?
No. Short-term rental accommodation arrangements do not require a person to hold or obtain a licence or permit in order to operate short-term rentals.
However, if a person acts as an agent for arranging stays, then they may need to be licensed as a real estate agent in NSW under the Property and Stock Agents Act 2002.
Does a bond need to be paid for short-term rental accommodation arrangements?
No. There is no requirement for a bond to be paid under a short-term rental accommodation arrangement.
However, a security deposit can be collected in accordance with the Australian Consumer Law. This would be agreed by the host and guest through the short-term rental accommodation arrangement.
Note: if a residential tenancy agreement and not a short-term rental accommodation arrangement is entered into, then any ‘security deposit’ would be a bond under the Residential Tenancies Act 2010 and would need to be handled in accordance with provisions under the Act.