Byron Council seeks court precedent on holiday letting

Paul Bibby

Byron Shire Council is about to commence a major prosecution against an allegedly unauthorised short-term holiday-letting operation in the Land and Environment Court.

And in a media release issued today, Tweed Shire Council is considering similar action.

The council’s legal services co-ordinator, Ralph James, told The Echo that officers had spent months gathering evidence against four separate properties where it is believed unauthorised letting had been taking place.

Mr James says the council was now ‘almost ready to go’ and was only waiting on external legal advice about the strength of the evidence, so it could decide which of the four properties to prosecute.

‘We are very close to launching the prosecution,’ Mr James told The Echo. ‘I’m expecting advice any day that it’s ready to go.’

Mr James said that the council had chosen to take one property owner to court rather than handing out fines to multiple property owners because it wanted the court to set a precedent.

‘The value of a precedent case is that’s the court’s judgment, then it applies to other properties with the same zoning,’ he said.

‘It is also valuable for the message that it sends to the community. It says that if you undertake unauthorised short-term letting this is what you can look forward to.’

Mr James said that if the council won the case, the property owner in question could be fined up to $1 million, as this was the maximum penalty that the Land and Environment Court could impose for ‘development without consent’.

However, if it lost there would be no penalty and the case would set a precedent that supported the type of short-term letting involved.

To ensure the council’s case could be proved beyond a reasonable doubt, officers had gone to great lengths to compile the briefs of evidence against the four properties.

Evidence gathering included trawling through short-term letting websites such as Airbnb and Stayz and watching suspect properties to see if there were cars with interstate number plates coming in and out.

Officers had also investigated unauthorised building work, and followed up complaints from neighbours. However, many neighbours had been unwilling to give formal written statements.

‘You’ve got to be prepared to give evidence in court and that’s where we often fall over,’ Mr James said.

‘I can understand why neighbours are reluctant – they still have to live there. But if they don’t go on the record then we’re trying to run the investigation with one arm tied behind our backs.’

Broader crackdown

The case is part of a broader policy targeting short-term letting, which the council believes is a significant contributor the region’s housing affordability crisis because it soaks up housing stock that could otherwise be used for long-term renting.

Of particular concern for the council are those who were allowed to build secondary dwellings without paying development-contribution fees on the basis that they would be offering affordable rental accommodation, but instead used the dwellings for expensive, short-term holiday rentals.

On September 17 last year, the council sent letters to 598 property owners who made use of this secondary dwelling policy, asking them to confirm in writing that they weren’t using their sheds and granny flats for holiday accommodation.

As of November 6, 2017 just 143 had replied. The council is now reviewing the effectiveness of the secondary-dwelling policy. It is not known whether one of these properties is the focus of the council’s pending legal action.

The particular type of holiday-letting operation involved will be crucial in determining the effectiveness of any precedent set by the case both legally and in terms of general deterrence.

Holiday-let groups’ view

The president of the Holiday Letting Organisation, John Gudgeon, said that he had no issue with the council prosecuting a property owner who did not have permission to conduct short-term holiday letting on their property, but that this did not have anything to do with mainstream holiday letting.

‘The standard planning permission for a residential premises allows you to rent it out for short-term or long-term use,’ said Mr Gudgeon, who was also speaking on behalf of the Holiday Rental Industry Association on this issue.

‘There’s an inalienable right of people to use their properties in this way.’

Mr Gudgeon said he strongly disagreed with the council’s short-term letting policy, which states that ‘the use of dwellings for short-term holiday accommodation falls within the Standard LEP Template definition of ‘tourist and visitor accommodation’ and is a prohibited land use in the residential zones of the Byron LEP 2014.’

Some properties are exempt from this rule, including those located in B2 Local Centre zones and SP3 Tourist zones, and most one-bedroom bed-and-breakfast establishments.

‘I am very surprised to hear that the council are saying that that is the case,’ Mr Gudgeon said.

Policy ‘ineffective’

Matthew Hartley, a former council candidate and vocal critic of what he describes as ‘illegal holiday letting,’ said the council should be pursuing a more direct approach to the issue rather than expending time and resources on a precedent-setting case.

‘They already know how to use penalties and these penalty infringement notices could be issued today,’ Mr Hartley said.

‘Council staff should send letters, and then make phone calls to every real estate agent and letting agency telling them to show all of the properties they’ve been letting out and then cross-reference that information with the zoning and approvals for those properties,’ Mr Hartley said.

‘Then those properties that are in breach of the law should be fined every night until they comply. These people know they’re committing crimes.

‘If Council takes a firm line there would be a huge influx of money that could be used to benefit the community,’ he said.

Tweed also acting

Meanwhile Tweed Shire Council is pursuing legal action against an unapproved short-term holiday let at Casuarina as it deals with a spike in complaints about unauthorised operators in the shire.

The council says so far this year it has begun investigations against seven reported unauthorised short-term holiday-let operations.

Planning and regulation director Vince Connell said the council’s compliance officers were ‘obliged to thoroughly investigate’ all seven instances of ‘potentially prohibited or unauthorised short-term holiday lets’.

‘If those procedurally fair compliance investigations produce substantive evidence of unauthorised operations, council may take legal action in the NSW Land and Environment Court,’ he said.

‘Our compliance officers are reporting a widespread lack of knowledge among property owners on the current statutory planning restrictions on short-term holiday lets and the relevant approvals processes they need to follow.’

The Tweed Local Environmental Plan 2014 precludes short-term holiday accommodation in specific residential zones including R1 – General Residential, R2 – Low Density Residential, R5 – Large Lot Residential, B1 – Neighbourhood Centre, B5 – Business Development, B7 – Business Park, and IN1 – General Industrial zone.

Short-term holiday lets require a Development Application (DA) approval in R3 – Medium Density Residential, B2 – Local Centre, B3 – Commercial Core, and B4 – Mixed Use zones.

Mr Connell said the council as ‘committed to maintaining the principals of the Local Environmental Plan 2014 through compliance enforcement action’.

‘Unapproved short-term holiday lets can adversely affect neighbourhood amenity through increased noise, traffic volumes and demand for infrastructure and reduced privacy. Thus the restrictions on short-term holiday lets in some zones reflect the needs of the broader community [that] the council is compelled to represent,’ he said.

Property owners seeking to establish a short-term holiday let should first check on the council’s current planning controls on the TSC website or by visiting one of its administrative centres at Murwillumbah and Tweed Heads.

The New South Wales Government is yet to determine its broader policy position on short-term holiday lets.