AIRBNB property owners face hefty fines

September 29th, 2014 | | Accommodation
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Clement Marcela, Airbnb – speaking at WYSTC

As councils grapple with how to regulate the growing home ‘sharing economy’, Sydney property owners are being threatened with fines of more than $1 million for renting out rooms in their homes through sites such as Airbnb.

According to a report in the Sydney Morning Herald (Councils threaten home owners with $1 million fine for renting rooms, Sydney Morning Herald, 26 September 2014), residents in Newtown and Randwick have been instructed to apply to become bed and breakfasts – a process which may include expensive upgrades such as fitting commercial kitchens.

One woman, who asked to remain anonymous, and who was renting out a room through Airbnb, was notified by Randwick Council in April that it had evidence she was running an ‘unauthorised’ bed and breakfast from her home. The letter from the council gave her 10 days to explain why it should not take action against her, warning she could be liable for a maximum penalty of $1.1 million plus an additional $110,000 a day.

“I feel like they’re making the rules up as they go along because they have no clear guidelines yet,” the woman said.

Trevor Atherton, of Atherton Legal, which specialises in tourism law, said several Sydney councils were telling residents they would need to lodge development applications and were threatening the huge fines for what the councils saw as an illegal breach of their planning controls. “They have the right to impose those penalties,” he said. Mr Atherton successfully argued that this particular woman was legally entitled to rent out one of her rooms to short-term guests, listing grounds including that the property was a ‘dwelling’, a home business and not a bed and breakfast – an ‘inappropriate’ categorisation, given she didn’t provide meals.

A Randwick Council spokesman told the Sydney Morning Herald that it had concluded after further inquiries the short-term stays were a “lawful ancillary use” of the woman’s home. In some cases, it was a neighbour’s complaint that prompted the properties to be singled out for council attention from about 7600 Sydney listings on Airbnb.

Sam McDonagh, Airbnb’s country manager for Australia and New Zealand, said the regulatory framework in NSW was ‘confusing’. “Queensland and Victoria both already have clear rules that allow people to rent out their homes for any period of time,”

A City of Sydney spokeswoman said its planning controls “have not caught up with the rapid development of the collaborative consumption market led by companies like Airbnb”; however in what appears to be a contradiction to its stance – the council has been promoting the Airbnb website in a guide for international students.



Written by Kris Madden


Last week Air BNB presented a seminar session at the World Youth and Student Travel Conference (WYSTC) in Dublin. Read what Clement Marcelet, Airbnb’s Hospitality Innovator, had to say here:

5 Responses

  1. Rikki says:

    Interesting read! Also good to see Airbnb making all the right noises in their conversation at WYSTC. Talking about how they want to “engage all the stakeholders within the communities” and “local regulations are essential to providing a level-playing field for existing accommodation providers”

    The Sharing Economy is here to stay and good luck to them. If they keep their commission rate at 3% then there is no reason why accommodation providers shouldnt be jumping all over it. Im sure Web Res, Et Al are anxious!!

  2. d curtis says:

    I do have a problem when neighbours set up these so called short term stays which can 7 days a week by various guests who create noise who in this case bring not just one dog but three that all barked on and off for three days and make money from this while their neighbours suffer and while airbnb make their percentage I truly think is unbalanced and immoral. While other peoplepeople who

  3. C. Fenton says:

    Our neighbour is actively letting out her home to groups for parties including two bucks parties. We are having bad behaviour and noise problems but local council has not come back to us when we spoke to them in February of this year Our only recourse at this point is to phone police when it all becomes too much. Airbnb is almost impossible to contact regarding this problem

  4. Keith says:

    There is Case Law in the NSW Land and Environment Court (LEC) where a husband and wife took action against their neighbour who was letting the house next door out as a short-term rental. They did this after their local council failed to act.

    The LEC Judged and Ordered that the short-term letting stop. I hope the following web link will allow you to see details. You can read the transcript by popping the following into google search. You might also be able to find it by searching for Dobrohotoff v Bennic:

    “…the respondent “readily agreed that she could not guarantee compliance with the House Rules or the Code of Conduct. As Ms Bennic stated, “I have no control over any other person do I really, in realism (sic), I can only control my own conduct I can’t control other – other people’s conduct.””

    After a hurculean effort, which was no doubt aided by SMH Media Reports, our local council finally took our short-term letting operator to the LEC last year. Court Orders were issued, stopping his “Illegal Use of Premises” and he now has a Penal Notice:

    “Take Notice that the Order made by the Land and Environment Court on 27 March 2015 and entered (which bears this Penal Notice) will, if you disobey the Order, render you liable to imprisonment or to sequestration of property in addition to liability for a fine…”

    The NSW Government is in the midst of a Parliamentary Inquiry over the legislation regulating short-term holiday/tourist letting of residential properties. Take it that those making MASSIVE MONEY and Councils who should be mandated to enforce their zoning conditions are lobbying hard to have the legislation changed so that this use of our housing is permitted state-wide.

    All I can suggest is that your lobby your State MP and do it TODAY!

  5. Keith says:

    Also look for

    On 10 May 2015 Airbnb had 9,700 listings in Sydney.

    On 01 May 2016 Airbnb had 15,678.

    There goes 15,678 residential housing places which should be available at an affordable price to Sydney residents.

    And remember, Airbnb is one only of literally hundreds of Internet platforms offering short-term letting of residential properties, but are our Politicians complaining?