16 January 2019

REINSW weighs in on holiday letting Code of Conduct

In August 2018, reforms to the short-term holiday letting industry were assented to. The reforms introduce the opportunity for a new regulatory framework that will protect residents while still allowing communities to financially benefit from increased local tourism.

The Fair Trading Amendment (Short-Term Rental Accommodation) Act 2018 (STRA Act) saw many wins for REINSW members, landlords and tenants, specifically, the implementation of a Code of Conduct. 

Establishing clear guidelines

REINSW CEO, Tim McKibbin, says establishing a Code of Conduct offers transparency in an otherwise largely unregulated industry.

“We fought hard for the registration of residential properties used for short-term holiday letting to be included in the Act,” he says. “With this, at least there is a foundation for a regulatory environment in which industry participants understand the consequences of adverse behaviour.”

The Code of Conduct – proposed by REINSW in its submission and contemplated in the STRA Act – will set out the rights and obligations of all industry participants, as well as providing for the resolution of disputes and complaints. 

An important win for REINSW members, landlords and tenants is the registers contemplated by the STRA Act. 

“REINSW is lobbying for an owner register and guest register with a process of identification established so that the parties to the transaction are clearly known,” says McKibbin. 

“REINSW continues to express its concerns that the short-term holiday letting industry is one of the most unregulated industries in Australia. 

“It allows individuals, often not the owner of the property, to rent a property for the sole purpose of deriving an income, usually without insurance and with no regard for guests.”

McKibbin says REINSW applauds the NSW Government’s initiative in seeking to create a robust and workable framework for this industry that will see it continue to grow and prosper. 

“However, REINSW hopes the NSW Government appreciates that this framework will only be successful and workable with the implementation of the registers.”

Registers to protect industry participants

“REINSW strongly recommends the introduction of an owners register, requiring owners to prove ownership prior to registration of their residential premises,” says McKibbin. “This is an essential factor to ensuring compliance for short-term holiday letting.

“Additionally, REINSW recommends a similar compliance check to that required under the current smoke alarm legislation and swimming pool requirements to ensure the premises is compliant with consumer safety legislation and has the correct insurances in place.”

Once ownership is verified, REINSW recommends a registration number be applied to the property. 

“This registration number should be a mandatory requirement to list a property on booking portals and websites,” says McKibbin.

Similarly, REINSW suggests that guests should also be required to provide proof of identification (such as a driver’s licence or passport) prior to booking short-term holiday rental accommodation and, once verified, should also be given an identification number. 

“A guest register will form an integral part in safeguarding the interests of all parties involved in a short-term rental arrangement,” says McKibbin. 

McKibbin says this process mimics the traditional check-in of guests at hotels.

“When a guest arrives, they are required to present themselves to the check-in desk and are asked to provide photo identification and a credit card, which will be charged at a later time should any damage occur,” says McKibbin.

“Under the current legislation, how is a guest to be found if they use false identities and contact details when booking the short-term rental accommodation? As you can imagine, this causes concern particularly as the responsibility of the property (and of hundreds of thousands of dollars in property value) is handed over to the guest and their visitors.

“The establishment of a register will assist in preventing undesirable behaviour, and gives the owner recourse to recoup damages, if required.” 

Empowering investors

REINSW has also raised concerns regarding inconsistencies in current legislation regarding the rights of landlords to determine the nature of occupancy of their investment property.

“It is REINSW’s position that landlords, in their absolute and unfettered discretion, should be able to decide whether their property may be sub-let by their tenant and, without providing an exhaustive list, landlords should also be able to determine the nature of occupancy,” says McKibbin.

“Without the express consent of their landlords, tenants should not be able to sub-let the premises for the purpose of short-term rental accommodation." 

McKibbin says REINSW will lobby for an owner register and guest register so all parties in a transaction are clearly known and understand their respective obligations. 

“We will continue to work proactively with NSW Government,” he says. “It is our hope that our proposal to create owner and guest registers will be considered and implemented to create an improved and streamlined short-term holiday letting system across the state.”

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