Will Sydney become just a one-night stand?
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.”
chapter previous next