How to host on Airbnb? What legal and regulatory issues should you consider? 如何开始 Air BNB? 有哪些法律相关知识您必须知道?

Transcription

1 How to host on Airbnb? What legal and regulatory issues should you consider? 如何开始 Air BNB? 有哪些法律相关知识您必须知道? Friday 8 June 2018 Presenter: Sarah Hou Director

2 Overview Airbnb is often described as products of the sharing economy With over 60,000 users in 34,000 cities across 191 countries Airbnb has more than 16,000 New Zealand listings Currently, NZ legislation does not make sufficient provisions for hosting on Airbnb

3 Potential issues to arise: 1. Safety is a key concern that an accommodation provider typically is required to consider when allowing others to stay in their property. Airbnb disclaims any responsibility for maintenance, repairs and cleaning of units. They exclude themselves from responsibility for regulatory compliance and state it is the host s responsibility to be aware of local regulatory regimes requiring fire exits and smoke alarms. The Fire Safety and Evacuation of Buildings Regulation 2006 set out that an owner of the Building must maintain means of escape from fire for the building. s4. Schedule One lists the types of building to which this Act applies which includes hotels, motels and other premises providing accommodation to the public. It is unclear whether Airbnb rentals fall within the meaning of other premises, a literal interpretation would suggest they do, however the primary function of the hosts premises is designed to be used as a personal home, which suggests they fall outside of the regulatory regime. The Act also states that the owner of a building must provide an evacuation procedure that must be approved by the National Commander and a trial evacuation must take place (s 6, s 21C and sch2) a burdensome process for an average homeowner looking to utilise a spare room. However, these regulations have been put in place to ensure public safety when staying in accommodation for which they have paid a fee. This rationale applies equally to the provision of Airbnb services as it does to hotels, motels and hostels. Clarification of the status of Airbnb rentals is required to ensure fundamental public safety requirements are met. If Airbnb is not subject to this regulatory regime, then travellers need to be aware of this, via the description of the accommodation on the website so that they are able to make an informed choice.

4 Potential issues to arise: 2. Accommodation Provider Targeted Rate in Auckland (APTR) The APTR is a targeted rate introduced in 2017 to partly fund the activities of Auckland Tourism, Events and Economic Development (ATEED). It is charged to commercial providers such as hotels, motels and serviced apartments, that benefit from ATEED s work in promoting the city. Auckland Council imposes APTR from 1 July 2018 that is factored into the annual rates levy. If the Council go ahead with this proposal, any changes in your rates will apply from 1 July They will show in your August 2018 rates invoice. The APTR is charged at different levels depending on the zone. Properties in zone A or B are charged the APTR, properties in zone C are not. A (Higher): Alber-Eden, Devonport-Takapuna, Mangere-Otahuhu, Maugakiekie-Tamaki, Oraki and Waitemata B (Lower): Henderson-Massey, Hibicus and Bays, Howick, Kaipatiki, Manurewa, Otara-Papatortor, Puketapapa, Upper Harbour, Waiheke and Whau C (No Charge): Franklin, Great Barrier, Papakura, Rodney and Waitakere Ranges Accommodation Types affected: the proposed rate only apply if you are using online flatforms to let out. An apartment, an entire drawing and a selfcontained unit do not apply if only part of the dwelling is let, such as a bedroom.

5 Number of nights booked per year APTR rates level General rates level Up to 28 Does not apply Continue to be rated as residential % of APTR if the property is zoned A or B Rated as 75% residential and 25% business More than % of APTR if the property is in Zone A or B Rated as a business

6 The Queenstown Lakes District Council provides clear guidelines regarding the requirements for resource consent, and whether hosting activities trigger a rates increase of at least 25%. It also requires letting homeowners to register as a homestay or holiday home when certain criteria are met. Potential issues to arise: (complaints) 3. Whether a body corporate can tell you what you can do in your unit. Experience to date indicates such control are usually imposed by either rule changes; or by covenants set out in an encumbrance instrument, registered against titles in the residential development. Such covenant control the use of the units, or require owners to exercise their statutory rights and obligations under the Unit Titles Act 2010 in restricted ways.

7 Rule changes Check the body corporate operational rules in respect of any residential apartment being used for short-term visitor accommodation it must be fully service. Schedule 1 of the Unit Titles Act 2010 provides for the default operational rules which deal with mundane issues such as undue noise within the unit or around common property, parking on common property and removal of rubbish. S 106 (1)(a) of the Act recognises amendments of the operational rules may extend to issue such as the control, management, administration, use, or enjoyment of the principal units. The body corporate operational rules can be changed by passing by mere resolution. (s 106(3)(a)). The Act has a default provision enabling resolutions to be passed by a rump of owners, who attend any subsequently called meeting, if the first meeting does not achieve the necessary quorum. Thus the operative rules can be changed with relative ease. The Supreme Court has recently explained, an amended rule cannot derogate from inherent ownership rights. Wu v Body Corporate [2014] NZSC 137, at [100]. This understanding is reinforced by s 79(d) which enshrines every owner s right of quiet enjoyment of his or her unit without interruption by other unit owners or occupiers

8 Remedies Relief may only be available where an owner was at the AGM or EGM where the appropriate resolution was voted on. In such circumstances, that owner may apply for relief (within 28 days), on the basis that the resolution would be unjust or inequitable for the minority. The above points have not yet been properly teased out to date. In Robin St Helens v Body Corporate 86105, a rule change was passed which required units to no longer be available for the provision of sexual services. This came before the Tenancy Tribunal, changed as being unjust or inequitable for the minority under s 210. Australian musings. A body corporate attempted to enforce a rule restraining owners from letting their units for a term of less than 30 days the conferment of power to be unequivocal.

9 Encumbrance instruments Restrictions set out by encumbrance instrument are also used as a device to ensure compliance with out of statute obligations. Such restrictions may restrict the use of units, or require owners to exercise their statutory rights or obligations under the 2010 Act in certain ways. Such developments rely on the effect of ss97(3) and 100 of the Land Transfer Act 1952, and ss 79 and 203 of the Property Law Act 2007, which make encumbrances personally binding against future land owners. The success of this device is mixed. In 2012, in ABCDE Investments Limited v Van Gog, terms of an encumbrance instrument were found to be effective in terms of restricting proprietor s rights to let their units. This encumbrance is registered before the unit title development was created. However, in 2015 the High Court in Newhaven Waldolf Management Ltd v Allen, the Court observed that where encumbrance covenants conflicted with provisions set out in the 2010 Act, those terms may be ineffective. The following observations may be of assistance: Where proprietors agreed to restrict their use of the units at general law, secured by encumbrance covenants, this does not engage the provisions of the Act. This is seen as a private agreement between those proprietors. However, where proprietors agree to be bound in a way that conflicts with their obligations under the 2010 Act, they may be held to be in contravention of their statutory duties.

10 Conclusion The exercise of body corporate control over the use of units in a residential development is currently a live issue. We do not have a clear understanding of the extent to which a body corporate can control the use of a unit, especially where that use is permitted at general law. 4. Potential issues to arise: Overseas Investment Amendment Bill