November 23, 2013 Cogent Lawyers

Many holiday-house lettings illegal

Hundreds of central coast holiday home-rentals have been exposed as unlawful by a recent court decision.

A court has found that renting out a home in a residential zone for short-term holiday letting is prohibited and in breach of planning laws. The decision hinged on the interpretation of what uses are permissible in a residential zone of the Gosford Council but will equally apply in other local government areas if their local environmental planning provisions are similar.

The case involved a home in the tourist suburb of Terrigal which had been let out for short-term stays, for example, over weekends, and was often host to loud, late-night parties, buck’s and hen’s parties etc. The situation became unbearable for the neighbours who complained to the council, which did not do anything about it. The neighbour finally brought a case against the landlord.

The court found that a ‘dwelling’ under the planning scheme required some level of permanence of habitation or occupation. The use of the house for buck’s and hen’s parties was not consistent with its use as a dwelling house as required by the zoning for the area. However, the court noted that some short-term stays may nevertheless satisfy the definition of a dwelling house, for example holiday houses that are used exclusively by a family for a limited amount of time each year, or even time-shared between several families, and houses that are owned by a company and rented out to executives and their families for short durations.

As a result of this decision, many homeowners who rent homes out to holiday-makers are now open to potential civil or criminal proceedings for their actions, depending on the zoning and planning regulations in the area.

You might wish to talk to your solicitor if you think your property might be affected by this decision. If you are looking to buy property with the intention of renting it out on short-term leases, you should make this clear to your solicitor so appropriate checks can be made.