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Agent ordered to pay $750 000 for 'stealing clients' and database

Rival real estate agent to pay Toops $750,000 after settling case

Harris Real Estate and one of its agents have agreed to pay Toop Real Estate $750,000 after the prominent Adelaide Hills agent used confidential files in breach of her contract and lured clients to Harris.

The settlement, executed in the District Court today, says Hooper used the files to develop business with rival agency Harris Real Estate, where she is currently employed.

Hooper ended her employment at Toop in June 2015 after disciplinary action was taken against her.

At an earlier District Court hearing, Toop sales and marketing CEO Genevieve Toop alleged that Hooper had “cracked” during a meeting at the agency’s Norwood offices in May 2015 when she realised the disciplinary action would make her ineligible for the company’s annual awards.

Hooper ended her seven-year employment at Toop on June 29, 2015, and commenced employment with Harris RE the following day.

The settlement said Hooper executed seven sales agency agreements on behalf of Harris Real Estate while still employed at Toop and altered at least 13 client records in Toop’s customer database by downgrading recorded interest levels of those clients from “hot” or “warm” to “cold”.

Hooper agreed she had printed data of more than 240 clients in Toop’s customer database with the intention of using the data to benefit of Harris Real Estate and had solicited work from 15 people who had done business with Toop.

Hooper also accepted she had enticed another employee of Toop to resign from the agency and take up employment with Harris Real Estate.

Toop’s lawyers had argued Hooper’s actions resulted in close to $30 million in property sales, which would have earned the Toop business commissions of more than $237,000.

 

Both Hooper and second defendant Harris Real Estate were today ordered by Auxiliary Judge Clayton to pay Toop RE $750,000, which includes interest and costs, within 21 days.

“I congratulate the parties and their advisors for arriving at a settlement,” Clayton told the court.

“This result is one which demonstrates commercial nous.”

Hooper was not present at today’s hearing but said in a statement to InDaily that after “a great seven years at Toop and Toop it is disappointing that things have ended this way.”

“It has become clear to me that our current employment contracts do not allow clients to choose who they wish to represent them,” Hooper said.

“This is something that needs to be addressed in the industry in the long term.”

Hooper said she was grateful for the support of Harris Real Estate and was looking forward to moving on “with clear air”.

The Toop family described the settlement as a win on behalf of “quality real estate agencies around Australia” in a statement issued after today’s hearing.

“TeamToop and FamilyToop have made a stand for integrity in business,” the statement said.

While employed at Toop, Hooper took out REISA’s hills salesperson of the year award in 2014. 

InDaily has contacted Harris Real Estate founder Phil Harris for comment. Sourced from www.indaily.com.au September 24 2018

Agent's handshake found not to be a crime

NSW

Reasons for decision

Introduction

  1. The applicant asserts that she is a victim of violent crime and has suffered injury as a result. The victims of crime scheme provides that eligible victims may be eligible for financial grants and access services under the Victims Rights and Support Act 2013 (the Act).

  2. In order to be eligible to recover under the scheme, a victim must either be a primary victim (the victim of an assault), or a secondary victim or family victim. As will be explained in these reasons, victims of crime must meet various statutory tests to receive benefits under the scheme. In the current matter, the applicant has failed to establish that she was a victim of a violent crime (the statutory term being ‘act of violence’) in accordance with the Act, and as a result her application for review will be dismissed and the decision of the respondent will be affirmed.

Background

  1. On 7 February 2018 the applicant filed an application for administrative review with the Tribunal. That application concerned how the respondent had dealt with her initial application and internal review for Victims Support.

  2. The application for review set out the following grounds:

I disagree with the decision by Victims Services as:

1. It was primarily based on the police report E64919537 (which was inaccurate and contained numerous factual errors).

2. It should have been based primarily on medical reports from my treating health professionals, myself and my son (a witness of the action).

Legislation

  1. On 3 June 2013 the Victims Rights and Support Act 2013 replaced the former Act – the Victims Support and Rehabilitation Act 1996. (the 1996 Act). Both schemes provided for similar eligibility criteria, with the main difference being the manner in which they provided support and assistance. The current Act replicated the 1996 Act central provisions as to an eligible victim of crime. The relevant current provisions are set out in the following sections of the Act:

5 Meaning of “victim of crime”

(1) For the purposes of this Part, a victim of crime is a person who suffers harm as a direct result of an act committed, or apparently committed, by another person in the course of a criminal offence.

(2) A person suffers harm if, as a result of such an act:

(a) the person suffers actual physical bodily harm or psychological or psychiatric harm, or

(b) the person’s property is deliberately taken, destroyed or damaged.

(3) If the person dies as a result of the act concerned, a member of the person’s immediate family is also a victim of crime for the purposes of this Part.

(4) If a person dies as a result of the act concerned and there is more than one member of the person’s immediate family, members of the immediate family may nominate a representative for the purposes of the Charter of Victims Rights.

….

19 Meaning of “act of violence”

(1) In this Act, act of violence means an act or series of related acts, whether committed by one or more persons:

(a) that has apparently occurred in the course of the commission of an offence, and

(b) that has involved violent conduct against one or more persons, and

(c) that has resulted in injury or death to one or more of those persons.

(s-19 has seven further subsections that are not relevant to this determination)_

….

20 Meaning of “primary victim”

(1) A primary victim of an act of violence is a person who is injured, or dies, as a direct result of that act.

(2) A primary victim of an act of violence extends to a person who is injured, or dies, as a direct result of:

(a) trying to prevent another person from committing that act, or

(b) trying to help or rescue another person against whom that act is being committed or has just been committed, or

(c) trying to arrest another person who is committing, or who has just committed, that act.

….

  1. There are various statutory tests which need to be met before a person can receive benefits under the Act. The administrator (the Commissioner of Victims Rights) understandably focussed on these threshold issues in both the initial decision and the Internal Review decision. It is therefore necessary to examine these threshold tests. The first is whether the applicant is the victim of an act of violence.

Jurisdiction

  1. There is no dispute that the Tribunal has jurisdiction to hear the matter. Section 51 of the Act provides for administrative review by the Tribunal.

51 Application to Tribunal for administrative review of decision concerning recognition payment

(1) An applicant for a recognition payment who is aggrieved by the decision of a decision maker in respect of the application may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of a decision made by the Commissioner following an internal review under section 49 of the decision maker’s decision with respect to the recognition payment.

(2) An applicant for a recognition payment who is aggrieved by the decision of the Commissioner in respect of the application may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of a decision made by the Commissioner.

  1. Nor was there any dispute that the application had been lodged within the 28 day period provided for by the operation of the s 55 of the Administrative Decisions Review Act 1997, (the ADR Act) and cl 23 and 24 of the Civil and Administrative Tribunal Rules 2014.

  2. The application under s 51 of the Act followed an internal review under s 49 of the Act. That review on 10 January 2018 reached the same decision as the original decision maker had on 6 October 2017. The Assessor had dismissed the application as the applicant had not established that she was the victim of an act of violence as defined in the Act. The application to the Tribunal was subsequently lodged on 7 February 2018.

  3. The Tribunal’s powers in relation to an application for administrative review are governed by s 63 of the ADR Act, which provides:

(1) In determining an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:

(a) any relevant factual material,

(b) any applicable written or unwritten law.

(2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision.

(3) In determining an application for the administrative review of an administratively reviewable decision, the Tribunal may decide:

(a) to affirm the administratively reviewable decision, or

(b) to vary the administratively reviewable decision, or

(c) to set aside the administratively reviewable decision and make a decision in substitution for the administratively reviewable decision it set aside, or

(d) to set aside the administratively reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.

Hearing

  1. At the hearing the applicant appeared in person and the respondent was represented by an employee Solicitor. The applicant was assisted by her adult son who whilst having some involvement in witnessing the incident or part of the series of events in question, was not required to give evidence for either party. Only the applicant gave evidence in the hearing.

  2. The following material was filed by the parties in support of the respective positions:

Applicant’s written evidence

  1. The applicant filed written material in support of her application.

  • Application for Administrative Review dated 4 February 2018 including grounds - Exhibit ‘A-1’.

  • Statutory Declaration of applicant 27 March 2018 – Exhibit ‘A-2’.

Respondent’s written evidence

  • Documents filed under s 58 of the ADR Act dated 1 March 2018 (51 Pages) – Exhibit ‘R-1’.

The respondent also filed and served written submissions dated 23 April 2018.

The administrator’s decisions

  1. The application to the Commissioner of Victims Rights concerned matters alleged to have occurred on 27 May 2017. When asked to briefly describe what happened, the applicant stated:

Part 3 : Briefly Describe what happened:

‘I attended the auction of the property (detailed above and in the enclosed brochure). The real estate agent for the unit -‘X.X’ – put out his right hand and took my left hand in his. He squeezed my left hand very hard and left my hand swollen and in pain. I reported the assault to my doctor (see report by Dr ‘R’) and to the police, however the offender denies causing me the pain and suffering.’

  1. The initial assessment of the claim occurred on 6 October 2017. The decision maker recorded the following:

2. the applicant seeks approved counselling services with respect to that act of violence under section 26 (1) (a) of the Act.

Reasons for Dismissal

4. the application form states the applicant attended an auction and the real estate agent for the property put out his right hand, took the applicant’s left hand and squeezed it hard causing pain and swelling.

5. As stated above, an act of violence is an act that has apparently occurred during the course of the commission of an offence and involves violent conduct.

6. based on the information before me, I am not satisfied an act of violence has occurred in accordance with section 19 of the Act.

  1. The decision maker went on to dismiss the application. In applying for an internal review the applicant provided medical material concerning treatment receipts for physiotherapy and a medical certificate from her G.P. Dr ‘R’ stating that she was the victim of a physical assault. On 10 January 2018 on review the Senior Assessor reviewed the available evidence in some detail. The police actions and records were set out showing the inquiries made and the evidence obtained by police from the alleged perpetrator.

  2. Near the end of the decision the following is recorded:

21. I accept on a balance of probabilities that there was a handshake between (DJD) and the real estate agent; however this was in the context of saying ‘goodbye’. I do not accept on a balance of probabilities that the real estate agent assaulted her. There were no witnesses to the incident other than her son who was in the room next to her. He disputes that (DJD) screamed after the handshake and said an ambulance was not called to the location. This was at odds with (DJD)’s explanation to police. There was a lengthy delay of 3 months prior to (DJD) deciding to report the incident. Her version of events changed in the course of speaking with police. I accept the real estate agent’s explanation that he was saying ‘goodbye’ to (DJD).

22. The submissions by (DJD) suggest that a handshake could amount to an assault because she was injured. In my view, the conduct of shaking (DJD)’s hand was not reckless or violent. …

  1. The Senior Assessor concluded that the applicant had not provided sufficient evidence to establish that she was the victim of any act of violence. The application for review was dismissed.

The hearing

  1. At the hearing the applicant made several statements from the bar table. I determined that much of what the applicant was asserting was more in the nature of evidence than submissions and as a result she was required to be sworn and to give evidence. I explained the procedure of the hearing and the difference between evidence and submissions to the applicant who was not legally represented.

Applicant’s evidence and submission

  1. In the applicant’s Statutory Declaration dated 27 March 2018 the following information relevant to the matter is submitted.

  • On Saturday 27 March 2017 the applicant attended the auction of a strata property in a Sydney suburb. At the end of the auction the real estate agent gestured to the applicant (a handshake invitation) and took her left hand in his right hand and squeezed it very hard.

  • The applicant told her son about the matter immediately (her son having been a couple of meters away along the hallway of the home unit).

  • The applicant’s left hand became swollen and she was in severe pain for several months.

  • The applicant reported the matter to her doctor and attended several physiotherapy treatments and continued to find using her left hand very difficult over the ensuing months.

  • On 29 August 2017 the applicant reported the matter to NSW Police. The police attended the applicant’s home that evening in respect of the reporting for about 20 minutes. Event Number E64919537 was created as a result.

  • On 29 September 2017 an application for Victims support was made.

  • The applicant attests that the police report E64919537 is grossly inaccurate. Specifically the applicant denies telling police that :

She screamed or shouted as loud as she could (when the handshake occurred)

She told police that she fainted at the scene and an ambulance was called.

Her son suggested that the Real Estate Agent’s request for charity donations may have been misunderstood by the applicant as sexual advances.

She continually contacted the Real Estate Agent via text messages asking him ‘what are you doing’.

Or any evidence that she changed her story with police .

  • The police had no basis to make comments concerning the applicant’s possible or likely mental health issues.

  1. At the hearing the Tribunal utilised the provisions of s-38 (2) of the Civil and Administrative Tribunal Act 2013 to examine the applicant in the absence of any representation or cross-examination. The section provides:

38 Procedure of Tribunal generally

(1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision.

(2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.

  1. The applicant gave evidence that she had met the agent at an open house viewing of the property on 13 May 2017 some weeks prior to the auction date. The applicant contracted influenza sometime after the open house date and was still suffering from the flu on the day of the auction.

  2. The auction concluded. The applicant said to her son:

‘I want to say goodbye to ‘V’ (the agent).

  1. The agent put out his hand gesturing, and squeezed it tighter and tighter. The applicant stated that she was pleading in her heart for him to stop. Her hand was throbbing. The applicant dropped her phone.

  2. The applicant bandaged her (injured) hand herself. (A photo of the bandaged hand is in the s 58 documents). The applicant did not obtain medical treatment at the time.

Respondent’s submissions

  1. In written submissions the respondent stated that the applicant has not established that she is a primary victim of an act of violence and is not eligible for a recognition payment.

  2. The respondent submitted that whilst the applicant had provided medical evidence concerning an apparent injury or problem with her hand, that evidence is dated some four and five months after the date of the claimed incident.

  3. The respondent also highlighted the discrepancy in the applicant’s earlier evidence as set out in the police report. In addition the agent denies any assault and the applicant’s son who was nearby said he did not witness the incident.

  4. The son’s statement on page 34 of the s 58 bundle states:

‘(DJD)’ waited for (the Agent) at the entrance of the kitchen. (The Agent) said to ‘(DJD)’ “I’ll call you next week,” then put out his right hand and took ‘(DJD)’s left hand in his and pressed it.

Consideration

  1. I infer that the information in [29] is what the witness observed. The statement goes on to record what (DJD) said and did following the incident. I note that none of these matters immediately following the handshake were in contest. The matters in the police report however (concerning screaming and calling an ambulance) were in contest. However these matters do not specifically concern the alleged act of violence but may be relevant in determining the credibility of witnesses.

  2. I note in particular that the applicant did not wish her son to give any evidence at the hearing and only sought to rely on his statement. In addition I note that when police eventually obtained a version of events from the son, that version is broadly consistent with his statement. The discrepancies appear to relate to what the applicant has stated at various times. It appears that the discrepancies surrounding the incident relate only to the applicant’s evidence. The central incident is clearly disputed between the applicant and the real estate agent.

  3. I also note that the applicant did not seek to call the reporting police officers to clarify these discrepancies. I also note that when the police questioned the son the record shows that he provided a possible explanation as to some misunderstanding between the applicant and the agent. Again I observe that in the absence of further evidence either from the police or the son, this issue cannot be resolved. However the applicant tendered her son’s statement.

  4. In addition when the applicant complained to the agent’s employer the evidence indicated that she did not adequately supply the particulars of the incident. The delay in medical treatment has not been explained by the applicant.

  5. There appear to be two statutory impediments to the applicant’s claim succeeding. The clearest impediment is the apparent failure to meet the requirements of s 39 of the Act. Section 39 provides as follows:

39 Documentary evidence

(1) An application for victims support is to be accompanied by such documentary evidence as may be required by the approved form.

(2) Without limiting subsection (1), the documentary evidence to be required:

(a) for an application for financial assistance for immediate needs under section 26—is documentary evidence (such as a medical or police report) sufficient to support, on the balance of probability, the applicant’s claim to be a victim of an act of violence, and

(b) for an application for financial assistance for economic loss under section 26 or 27 or for a recognition payment—is a police report or report of a Government agency and a medical, dental or counselling report verifying that the applicant or child who is the primary victim concerned has actually been injured as a result of an act of violence.

(emphasis added)

  1. This mandatory requirement was introduced into the Victims of Crime scheme with the 2013 amendments to the scheme that resulted in the current 2013 Act. The Victims Support and Rehabilitation Act 1996 (the old Act) contained no such mandatory requirement even though the statutory phrase and meaning of ‘act of violence’ was expressed in identical terms to the current Act. The police report does not in my view support any act of violence in the nature of a deliberate or reckless act that could be classified as an assault.

  2. The medical evidence does not specifically identify the cause of any medical issue. Whilst some of the reports recite the origins of the injury they do no more than provide what would appear to be a history given by the applicant. I also note that they were provided between four and five months after the incident. The G.P. report of 22 September 2017 curiously states that:

This is to confirm that Mrs (DJD) was the victim of an alleged physical assault on 27/5/17.

(Emphasis added)

  1. I also note that the medical reports do not arise in the circumstances required by s 39, in that they are not a report from a Government agency.

  2. The other issue relates to the requirement for the matter to have ‘apparently occurred in the course of the commission of an offence’, as set out in s 19 (1) (a) of the Act. The legal concepts of mens rea and actus rea are relevant in all acts of violence under the Act notwithstanding the use of the term ‘apparently’ in the section.

  3. At law Mens Rea is generally meant to be the state of mind which is required to commit any kind of crime including property crime and crimes against the person or other types of crime. On the other hand, Actus Reus means the physical acts of the accused person which are required to be shown at trial to establish that an offence has been committed.

  4. Both Mens Rea and Actus Reus must exist simultaneously. On the evidence and material before me the actions of the alleged perpetrator do not meet the criteria of Actus Rea. The evidence in the son’s statement, namely that he observed the agent ‘put out his right hand and took (DJD’s) left hand in his and pressed it’ does not establish to the requisite standard physical acts to establish that an offence (of violence) has been committed. The agent denies any assault.

  5. There is no evidence to establish that the agent intended to assault the applicant. I make this observation based on all of the evidence including the totality of the applicant’s own evidence. The un-particularised issue concerning charity donations does not in my view (even on the applicant’s own version) indicate such a motivation or intention concerning the agent.

  6. In respect of the element of Mens Rea, I note that it is possible that the agent may have intended to harm the applicant. In addition his state of mind on the available evidence was such that the element could be technically met. However, on the evidence before me his actions appear neither intentional or reckless. The police spoke to the agent, his employer sought details of the complaint from the applicant (to no avail), and the applicant’s son made a statement as a witness. All of this material did not advance that applicant’s argument that the agent assaulted her.

  7. The medical evidence does not particularly assist. The G.P.’s report is many months after the incident. The photo shows a dressing that the applicant applied herself. There was no professional medical treatment at the time of the incident or shortly afterwards.

  8. The Tribunal must be satisfied on the balance of probabilities that the agent intended to harm the applicant, in that it must be more likely than not on the available evidence that this was the case. In my view the evidence does not establish that it was more likely than not that the agent intended to harm the applicant.

Findings

  1. I do not find that the agent had the intention to commit a crime while he was shaking the applicant’s hand.

  2. Further I do not find that the agent committed a crime by shaking the applicant’s hand firmly or in some other physically hard or aggressive manner.

  3. I find that the applicant has not established that she was the victim of an act of violence.

  4. I also find that the applicant has not discharged her onus under s 39 of the Act.

  5. The applicant has understandably focused her application before the Tribunal on overcoming the issues identified by the earlier decision makers. Whilst s 39 of the Act was not specifically referred to in those decisions it was referred to in the respondent’s written submissions filed and served 27 April 2018.

  6. I note that the issues concerning whether an act of violence occurred were always central to the application.

Conclusion

  1. For the reasons outlined above, as the applicant has failed to establish that she was the victim of an act of violence, and has not satisfied the provisions of s 39 of the Act, the application must be dismissed and the decision of the respondent affirmed.

Orders

  1. The decision of the respondent dated 10 January 2018 is affirmed.

**********

 

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Decision last updated: 17 July 2018

Sourced from www.caselaw.nsw.gov.au 18 July 2018

 

New South Wales smoke alarms - coronial inquest

13th July 2018

The NSW Coroner have released their findings and made recommendations (below) into the tragic death of Miata Jibba in a rental property. I strongly recommend reviewing the inquest report which you can review here.

The most likely outcome will be amendments to smoke alarm legislation in the near future. I have an escape plan document to give to tenants at Member online in folder 03 smoke alarms. I will be creating best practice documents for members in the coming weeks in light of the inquest recommendations for immediate best practice change.

The above information was emailed to NSW FREE mailing list - join our mailing by emailing your name, email and location (such as Dubbo) to This email address is being protected from spambots. You need JavaScript enabled to view it.

Review the inquest and findings here

 

Carpet cleaning and Queensland property management

Pets and pest control information; Real Estate Excellence member offices, please refer to the February 2018 Member Update or email us to receive.

Friday 8th June 2018

Good morning Real Estate Excellence members, a quick update (so much going on for you, sorry!). 
I have written to the RTA as shown below regarding carpets and pets, pool chemicals and more. I shall advise when I know more via the Real Estate Excellence FB Member group  and email as not all members of course are on social media and or not in this group.

Tuesday 5th June 2018

A best practice email/letter template to retract carpet cleaning special terms (as per advice from RTA training video) is now available for members at folder 6 carpet cleaning (property management/PME main folder), plus templates to assist members in advising and educating lessors.  login to member online to access or email us to receive. An email was sent to Platinum PME and Platinum non PME Member offices on 7th June 2018 with resources as per above.

Monday 4th June 2018

Click here to view training video from the RTA regarding special terms

 Property managers/owners often include carpet cleaning under special terms in a tenancy agreement to ensure a rental property is up to standard when the tenant vacates.

These special terms typically concern the obligations and responsibilities of a property manager/owner and tenant under the Residential Tenancies and Rooming Accommodation Act 2008 (the Act).

However, while carpet cleaning is not specifically referred to in the Act, the inclusion of a special term regarding carpet cleaning is not necessary, as carpet cleaning should be considered in terms of general rules around the standard and condition of a rental property.

Under section 188 (4) of the Act, the key phrase relating to tenants’ obligations is “as far as possible, in the same condition they were in at the start of the tenancy, fair wear and tear excepted”.

At the commencement of a tenancy, the standard or condition carpets are in should be clearly articulated through the Entry Condition Report with any evidence (i.e. photographs) attached.

The tenant, when exiting the tenancy, can then comply with their own obligations to clean the carpets to the same standard, fair wear and tear excepted.

If a special term states that a tenant must provide a receipt or engage a ‘professional’, it is a breach of section 171 of the Act (supply of goods and services). Tenants cannot be required to buy, or agree to buy goods or services from the property manager/owner or a person nominated by the property manager/owner.

For more information around tenancy and responsibilities, explore the RTA website or contact the RTA direct on 1300 366 311.

The RTA is a Queensland Government statutory authority that administers the Residential Tenancies and Rooming Accommodation Act 2008. We provide tenancy information, bond management, dispute resolution, investigations and prosecutions, and policy and education services.

Sourced from www.rta.qld.gov.au May 28 2018

RTA increases its prosecutions

Risks for property investors: Can your strata body corporate prevent you listing your apartment on Airbnb?

As the popularity of the “sharing economy” continues to grow unabated, issues can arise where regulations and commercial practices struggle to keep pace with technological change. While Airbnb hasn’t yet attracted the storm of controversy that Uber has, this may be starting to change as cities around the world, including in Australia, crack down on the home-sharing site.

In Australia the use of property for Airbnb is subject to regulation at multiple levels. For owners of units in apartment buildings however, there is an additional layer of regulation, the strata company by-laws. Since strata units are in such close proximity to each other, conflicts between unit owners can easily arise. Some unit owners may want to use Airbnb to let their units, because of the high returns, and indeed may have purchased an investment property on the basis of those returns. Other unit owners may object to short stay holiday accommodation in their complex because of fears of noise, disruption, security, loss of amenity and insurance and repair costs.

This situation has seen an increasing number of by-laws which purport to restrict short term letting. But are such by-laws valid?

The Position in NSW

The ability of strata by-laws to restrict short term letting varies between states. In NSW, the largest market for Airbnb in Australia, the position has been summarised by NSW Fair Trading’s ‘Strata Living’ fact sheet as follows:

“Strata laws prevent an owners corporation restricting an owner from letting their lot, including short-term letting. The only way short-term letting can be restricted is by council planning regulations.”

This is because of s.139(2) of the Strata Schemes Management Act 2015 (NSW) (SSMA) which states:

“No by-law is capable of operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot”

NSW tribunal decisions such as Estens v Owners Corporation SP 11825 [2017] NSWCATCD 63 have followed the interpretation outlined by NSW Fair Trading and struck down by-laws restricting short term letting. The position is similar in Victoria, where in Owners Corp PS 510391P v Balcombe [2016] VSC 384 the Supreme Court found that owners’ corporations did not have the power to restrict short term letting.

Recent WA and Privy Council Decisions

In contrast, the recent WA decision Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2017] WASCA 104 saw the Court of Appeal uphold a by-law restricting short term letting to no more than 3 months in 12. The Court of Appeal found that the by-law did not present a restriction on disposal of units in the strata scheme, but only a restriction on how the units could be used.

The Byrne decision has been well-received in a recent UK Privy Council decision, O’Connor (Senior) and others v The Proprietors, Strata Plan No. 51 [2017] UKPC 45, dealing with by-laws in the Turks and Caicos Islands. It may seem odd that a Privy Council decision should be seen as relevant in Australia, given the Privy Council is no longer a part of the Australian legal system, however the relevant provisions in the legislation of the Turks and Caicos Island had been lifted directly from NSW legislation and was identical to s.139(2) of the SSMA.

The Privy Council found that:

“statutes prohibiting restrictions on dealing in strata lots do not prevent reasonable restrictions on the uses of the property, even though such restrictions may have the inevitable effect of restricting the potential market for the property.”

The Impact of these Decisions

Decisions of the Privy Council are no longer binding in Australia. However, the expectation of many is that NSW courts and tribunals will now follow WA and Privy Council decisions and determine that s.139(2) of the SSMA does not prevent by-laws from restricting short term letting.

In fact, there is already a NSW Supreme Court decision, White v Betalli [2006] NSWSC 537, which sets out that principle. In that case it was held that a restriction on the use of part of a strata complex for boat storage was not a restriction on dealing in granting an easement for boat storage.

Conclusions

There is now considerable doubt over whether the SSMA actually does prevent strata company by-laws from prohibiting short term letting in NSW. The uncertainty resulting from recent case law provides an extra headache for strata unit owners wishing to let their apartment on Airbnb, in addition to complying with zoning and planning requirements. It remains to be seen whether there will be legislative changes to clarify whether a body corporate can prevent short-term letting.

In the meantime, if you are purchasing a unit in a strata complex and you intend to use it for Airbnb, you need to pay close attention to the by-laws that exist in that complex, and be well aware that those can change over time. It is important to be involved in your strata body corporate and to be active in figuring out how to best manage any downsides associated with short term letting.

Sourced from www.lexology.com May 15 2018