Thinking About Airbnb in Your Strata Property? Here’s What You Need to Know in NSW
If you own an apartment or unit in NSW, you might be wondering: can I rent out my apartment on short-term rental platforms, for example Airbnb or Stayz, to earn some extra cash? Short-term rentals are a great way to generate passive income, but when it comes to strata properties, things can get tricky legally.
This guide breaks down everything you need to know—without the legal jargon.
What exactly counts as a short-term rental in NSW?
In simple terms, a short-term rental is when you rent out a home or apartment for three months or less. This is commonly done through platforms like Airbnb, Stayz or Booking.com. The legal definition under NSW’s Fair Trading Act 1987 confirms this arrangement is considered “short-term rental accommodation” (STRA).
It sounds straightforward, but in strata buildings (like apartment complexes), there are extra rules you need to follow—especially those set by the building’s owners corporation.
Can my building’s strata rules stop me from renting out my place?
That depends. NSW law allows strata buildings to pass by-laws (rules) that “ban short-term rentals”—but only if your unit is not your principal place of residence. In other words, if you’re just using the property as an investment or holiday home, the strata committee can block you from renting it out short-term.
But if you live there as your main residence? The law protects your right to host short-term guests.
This rule came into effect under Section 137A of the Strata Schemes Management Act 2015 in April 2020.
What if I’m renting the property—can I still offer short-term rentals?
If you’re a tenant (not the owner), it’s very important to check your lease agreement before listing the property on a short-term rental site. Many leases have clauses that say you need the landlord’s written permission to sublet the whole place.
A legal case from 2017 (Abdel-Messih v Azzi) showed that subletting without permission—even for short stays—can breach the lease. In that case, the tenant’s lease was terminated because they used the unit for Airbnb without approval. The court said the landlord had every right to end the agreement.
So, before you consider hosting guests, check your lease terms and always talk to your landlord.
Can strata buildings really ban short-term rentals?
This question was at the centre of a big legal battle: Estens v Owners Corporation SP 11825 in 2017. A landlord was successfully renting her unit through Airbnb, but after complaints from neighbours, the owners corporation passed a by-law banning all short-term rentals in the building.
The landlord challenged the rule in the tribunal and won. The ruling said the by-law wasn’t valid because it stopped a legal “dealing” with a property—which wasn’t allowed under the strata laws at the time.
However, this case directly led to law reform. Today, thanks to Section 137A, strata buildings can pass a by-law to ban short-term rentals if the host doesn’t live there full-time. So yes, buildings now have more power—but only in specific circumstances.
What rules has the NSW government introduced for short-term rentals?
In December 2020, the NSW Government launched a mandatory Code of Conduct for everyone involved in short-term renting: hosts, guests, agents and booking platforms.
Here’s what it covers:
Host responsibilities – including proper insurance and guest behaviour
Guest behaviour standards – including noise, safety, and common-area use
Booking platform obligations – like removing hosts or guests who repeatedly break the rules
The Exclusion Register – people who get two “strikes” can be banned from participating in short-term rentals in NSW for 5 years
So even if your building allows short-term rentals, you must still follow the Code—or face serious consequences.
You can access the Code of Conduct here.
Do I need to worry about local council rules too?
Yes, especially if you live in a hotspot like Sydney. While NSW sets the general rules, local councils can add their own layers of regulation.
For example, Sydney City Council has pushed for stricter enforcement of short-term rental laws, arguing that too many investment properties are sitting empty or are only used for short-term stays. They’re concerned about the impact on long-term housing availability and affordability.
It’s a good idea to check with your local council before starting a short-term rental, just in case there are additional zoning, registration, or usage rules that apply in your area.
How can I make sure I’m doing everything by the book?
Here are some simple steps to help you stay compliant and avoid fines or disputes:
Check your strata by-laws – and get written clarification if needed.
Make sure your property is your principal place of residence, if required.
Ensure tenants adhere to by-laws.
Comply with the Code of Conduct – including guest behaviour and insurance.
Register your short-term rental if required – some areas require this by law.
Speak to a strata or property law specialist if you’re unsure about any of the legal requirements.
Final thoughts: Is short-term renting in a strata property worth it?
Yes—if done right. Short-term rentals can be a great way to earn extra income from your property, but it’s not a “set and forget” investment. With increasing regulation and community concerns, hosts must be well-informed and responsible.
By knowing your rights, understanding the laws and working with your strata committee (instead of against them), you can run a short-term rental business that’s both profitable and compliant.
Need help drafting or reviewing strata by-laws? Contact the NSW Strata & Property team at Grace Lawyers on 1300 144 436 or enquiries@gracelawyers.com.au
