A recent decision of the Land and Environment Court found that a Terrigal property owner had been unlawful in renting their property for short-term holiday lettings. This has obvious ramifications for anyone who currently owns a property within the Gosford City Council area and intends on letting the property as short-term accommodation, particularly over the upcoming summer period which is notoriously busy.
The case was Dobrohotoff v Bennic  NSW LEC 61. The decision hinged upon the interpretation of permissible uses for properties zoned residential 2(a) under the Gosford Planning Scheme Ordinance. The court held that the definition of “residential dwelling” does not extend to include short-term holiday lettings. The reasoning seems to be that the short-term nature of the property’s occupation by transient and ever-changing tenants and guests – effectively, the housing of tourists – was inconsistent with the requirement to use the property as a dwelling house. There needs to be some degree of permanence to the occupation.
Interestingly, the case arose following inaction by both the property owner and the council in response to continual complaints by a neighbour, the applicant in the proceedings, about the noise and type of occupants and activities coming from the relevant property. Justice Pepper of the Land and Environment Court observed that:
“[T]hese tenants have often engaged in antisocial behaviour that has significantly adversely impacted the amenity of the Dobrohotoffs. Loud music, flashing lights, bucks and hens nights (sometimes involving strippers, or worse), and frequent parties, often extending into the early hours of the morning.”
The consequence of this decision is that the short-term holiday letting of houses or apartments in Terrigal and other suburbs within the Gosford City Council area is clearly prohibited. The impact upon current and future property investors, as well as the local tourism industry, is not yet known.
This decision will also apply to other local government areas if they have similar provisions in their local environment plans. Those whose properties are located outside the Gosford City Council area should check with their own local council.
We’ve heard that Gosford City Council is in the process of amending the relevant ordinance so that property owners in the area can return to using their investment properties to accommodate short-term visitors. But, pending finalisation of any such amendments, property owners should be wary.
The above is not intended as legal advice. You should obtain legal advice in relation to your own specific circumstances.