Short answer
This is contested, evolving ground — short-term-letting by-laws are among the most disputed a scheme passes, and even the industry treads carefully here. Within that, the core position is reasonably settled: a NSW strata scheme can restrict short-term rental accommodation through a by-law, but only within limits. Under Section 137A of the Strata Schemes Management Act 2015, a by-law may prohibit a lot being used for short-term rental accommodation where the lot is not the host’s principal place of residence — so a full-time, whole-of-lot investment Airbnb can be restricted, but an owner-occupier letting out their own home (or a room in it) while they live there generally cannot be stopped. It is the owners corporation, not the committee alone, that makes such a by-law, and it must be passed and registered like any other. The cautious, correct approach: assume you can regulate short-term letting but not outright ban it where the lot is the owner’s principal home, and treat the council planning rules as a separate layer to check.
The principal place of residence catch
Section 137A draws the line at the host’s principal place of residence. A by-law made under it can restrict short-term letting of a lot that is not the host’s principal home — the classic case being an investor running a lot as a full-time commercial short-stay business while living elsewhere. It does not reach an owner who lives in the lot as their primary residence and lets it (or a room) short-term around their own occupation. This distinction is the whole point of the section, so a by-law that tried to ban all short-term letting regardless of principal residence would be reaching past what s 137A allows.
What it takes to put the by-law in place
A short-term letting restriction is a by-law, so it goes through the normal by-law process, not a committee decision. The owners corporation must pass it as a special resolution at a general meeting and then register the change with NSW Land Registry Services; until it is registered, it is not enforceable. A special resolution is one that is not opposed by more than a set proportion of the votes cast — confirm the current threshold and the exact drafting with a licensed strata manager or NSW Fair Trading before you rely on it, because getting the wording right is what makes the restriction stand up.
Once a valid by-law exists
A registered short-term letting by-law is enforceable like any other: if a lot is used in breach of it, the owners corporation can issue a notice to comply and, if the breach continues, apply to NCAT. Planning rules on short-term rental accommodation (such as day limits in some areas) sit alongside the strata by-law and are a separate layer — the by-law governs what the scheme’s rules permit, not the wider planning regime.
Getting a contentious by-law right
Short-term-letting by-laws are among the most disputed a scheme will pass, precisely because s 137A’s principal-residence line is easy to overstep. Straita takes the conservative path for you and keeps the work easy — it helps the committee run the change properly: record the motion, capture the special resolution, and hold the registered by-law where owners can see exactly what was decided — so the restriction is one the scheme can actually enforce rather than one that collapses the first time it is challenged.
Primary sources
- Strata Schemes Management Act 2015 (NSW) — short-term rental accommodation by-laws (s 137A), by-law changes by special resolution and registration (s 141).
- NSW Government — Short-term rental accommodation — the STRA framework and host obligations.
- NSW Government — Strata by-laws (Fair Trading) — making and registering by-laws.