Airbnb in Strata: What NSW Owners Need to Know

Since its launch in 2007, Airbnb has disrupted the hospitality industry, giving travellers a way to book spare rooms, apartments, and houses directly with owners. For many property owners, the appeal is simple: higher nightly income than a standard lease, plus the flexibility to keep the property vacant between bookings.

But in a strata scheme, short-term letting brings unique challenges—and Owners Corporations are paying attention.

Insurance Risks

Standard home and contents insurance policies don’t always cover short-term letting. That means owners could face significant financial exposure if guests damage the property or common areas.

This risk isn’t hypothetical. The Sydney Morning Herald has reported cases where increased use of pools and gyms by short-term guests led some buildings to restrict or ban Airbnb altogether.

Who’s Responsible for Guests?

If you own in a strata scheme, you are responsible for your guests—whether they’re friends, long-term tenants, or Airbnb holidaymakers. This includes:

• Noise and behaviour in both the lot and common property
• Damage to facilities such as lifts, pools, or lobbies
• Disturbance of other owners’ enjoyment of their property

In short: if your guests cause issues, you’re the one held accountable.

Why Airbnb Is Different

Traditional leases (6–12 months) usually attract tenants who treat the property as their home. In contrast, short-term guests may be in “holiday mode”—using facilities heavily, hosting parties, and moving in and out frequently. This turnover can create friction in otherwise stable strata communities.

By-Laws and Short-Term Letting

NSW law has a specific rule for this. Under section 137A of the Strata Schemes Management Act 2015, an owners corporation can make a by-law, by special resolution, that prohibits a lot being used for short-term rental accommodation, but only where the lot is not the principal place of residence of the person giving someone else the right to stay. If the lot is that person’s principal place of residence, a by-law that tries to stop short-term rental has no effect to that extent.

A short-term rental accommodation arrangement is defined in the Fair Trading Act 1987 as a commercial arrangement for giving someone the right to occupy residential premises, including part of the premises, for not more than three months at any one time. So the three-month line comes from that definition. It is not a power for a by-law to set a minimum lease term, and a by-law cannot prohibit or restrict a lease or other dealing with a lot (section 139).

If you think a by-law is being breached, the first steps are a written notice and a discussion with the owner. Where that does not resolve it, a dispute can be taken to NCAT. Because the rule turns on the host’s principal place of residence, it is worth getting advice before drafting or enforcing a by-law.

Metro Strata’s Role

At Metro Strata, we understand both sides of the Airbnb debate. Short-term letting can be an income boost, but it can also create risks for the wider community. We work with Owners Corporations to:

• Review insurance coverage
• Draft and implement by-laws
• Provide impartial guidance on managing disputes

Final Word

Airbnb has changed the way we travel and host, but in strata schemes, it comes with added complexity. Owners need to balance opportunity with responsibility, and Owners Corporations can set the tone for their community within the limits the law sets.