In Dobrohotoff v Bennic [2013] NSWLEC 61, the New South Wales Land and Environment Court deemed short term holiday home rentals in the Gosford area as unlawful and prohibited. This decision has broader implications on landlords seeking returns from the holiday rental market.
Across New South Wales, there are a variety of regulations and planning instruments that deal with the uses of property. Each local government area (council or municipality) usually has its own instruments and there are some overarching state wide planning instruments that apply to specific kinds of developments.
In this particular matter, the Land and Environment Court was asked to consider whether renting a property for short term holidays to large groups of people for up to a week at a time would be in breach of the relevant environment planning legislation and local planning laws, namely the Gosford Planning Scheme Ordinance.
In this particular case, the decision was based on the interpretation of “residential dwelling” and whether the short term nature of the lease meant that the property was being used as a “residential dwelling”.
The Court accepted that the ordinary meaning of “dwelling house” involved the occupation of the property in the same way that a family group in the ordinary way of life would occupy it. Whilst the Court said that some short term leases may satisfy the definition of a dwelling house, granting a lease to a large group of people for parties for a maximum of one week, was inconsistent with the use of the property as a dwelling and accordingly short term holiday use of the property was prohibited.
Landlords of holiday homes may be susceptible to potential civil or criminal proceedings. Accordingly, it is more important than ever that as a landlord or potential purchaser you understand the relevant the local environmental planning legislation to ensure that your proposed or actual use of property is allowed.
The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your specific circumstances.
