AIRBNB property owners face hefty finesSeptember 29th, 2014 | | Accommodation
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: http://www.wystc.org/the-airbnb-debate-at-wystc