Will Sydney become just a one-night stand?
LookUpStrata
25 October 2016

The Owners Corporation Network has said recommendations by a NSW Legislative Assembly Committee Inquiry into short-term letting would have serious ramifications for apartment owners who faced having their apartment buildings turned into “quasi hotels”.

Commercial short term letting has implications for insurance premiums, for body corporate levies, on creating communities, capital gains tax and could put mortgages in breach.

One Sydney CBD building saved $1.3m in the 3 years after stamping out short term letting. Expert reports revealed reduced lift life of 25% (5 years) at an estimated current cost of $500,000. Serviced apartments in another CBD building are worth around half of what residential apartments fetch in the same building.

“The Legislative Assembly report fails to take into consideration the legitimate concerns of apartment owners who bought their properties on the basis that these would be residential buildings,” says Stephen Goddard, spokesperson for the Owners Corporation Network.

“Strata owners have title to cubic air space with shared external boundaries – that’s all. The rest is ‘common property’, and shared ownership introduces a collective duty of care.

“The cost of repair and replacement is a collective shared expense for the benefit of a private individual who profits from short term letting, so the only thing ‘shared’ is the expense to replace damaged and worn out common property.

“If the majority of owners in a general meeting of an apartment block decide that common property can be used for this commercial purpose, that is one thing. And it must be properly regulated. But if the majority of residents do not want commercial short-term letting and this is clearly stated in regulations pertaining to the building, then that wish should be respected.
 
“The Inquiry’s failure to recognise that owners must have the right to choose how their collective asset will be used is a breach of fundamental democratic principles. That holds us back as a community.”


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