Strata problem with my holiday rental

Discussion in 'Adding Value' started by mandimoo, 19th May, 2013.

  1. mandimoo

    mandimoo Member

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    Hi guys,

    I received this letter the other day in regards to our investment property that we have been renting out for short term rental:
    "It has come to the attention of the strata that your unit is being used for the purposes of short stay accommodation. The zoning for the building is 'residential' and does not include use for short stay rentals.
    Short stay rentals are not encouraged and problems are occuring with your short stay tenants who do not know the rules, how to operate the gates and foyer doors, and second cars are being parked in the visitor's bays.
    Your cooperation in this matter would be appreciated."


    Help. What am I supposed to do? We did check the strata laws prior to purchasing the property to make sure that we could use the place for its intended purpose and it said nothing about that kind of thing. I am really quite annoyed, I understand the neighbours don't like the idea of it, but the tenants are screened, they are mostly small families or older couples, they are made aware of the rules although I cannot physically stop them from parking a car in the visitor bays (note that many of the permanent residents use the visitor bays for their second cars) and I give them step by step instructions on using the gates and doors. I am pissed off, I don't know what they are expecting me to do. I am feeling spiteful enough to get myself a six month lease with a heavy metal enthusiast with creative hobbies like cooking meth. They have BAD permanent tenants there frequently who are only removed to get carted off to jail, so I don't see the problem with maybe 10% of my tenants being annoying for a few days and then leaving.

    What should I do? What am I obligated to do? The letter did not explain much it was very short

    Thank you :confused:
     
  2. twobobsworth

    twobobsworth Member

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  3. mandimoo

    mandimoo Member

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    I'm in Perth, is it likely they will follow suit here? If so might be time for me to sell up as I would love to keep it for a holiday house but its too bloody expensive and the strata is too pricey compared with the amount of regular rent that we could get.
     
  4. chilliblue

    chilliblue Member

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    Ask the strata proof on what they have stated as they would have documented the incidents. No proof would basically invalidate the letter.

    Personally, if you were a resident of the block and what was stated is occurring, I think you would hope that strata does its job as they have in this instance.
     
  5. marg4000

    marg4000 Member

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    You are obligated to follow strata rules.

    There is a difference between long term tenants and "hotel" style stays. Many states are now enforcing 3 month minimum rentals in residential areas.

    This is simply ensuring that residential zonings maintain residential amenity.

    These enforcements apply to houses as well as units. Some residential areas are being ruined by so called "party" houses where the house is rented for a night for the purpose of a noisy party. Photographed behaviour is appalling.
    Marg
     
  6. mandimoo

    mandimoo Member

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    Our property is not being used for parties. I am more than happy to give my number out to the other residents so that they can call me if there is an issue with my tenants not following the complex rules, the only strata LAWS stated that there are no pets allowed on the premises and that visitor parking not be used for permanent parking. We have furnished our unit beautifully, employ professional and expensive cleaners, it is a beautiful apartment with ocean views all round and we are very protective over it and also very considerate people in general.

    There are 40 units in the complex and we are not the only people renting our place out for short term, other people rely on this income to actually support them. I do not understand why we would buy such an expensive asset and not be able to choose our method of rental. The way I see it we bought the unit, so technically if we wanted to, we could move into it ourselves with our 3 young children, who make a **** load of noise, wake up screaming at all hours, and I assume they would rather have the unit mostly vacant than have us living there, which is within our right.

    If I sell it it will be at a huge loss as it was only purchased a year ago. If we were to rent it out regularly we would probably be looking at 450/week but given that the strata fees account for 100 per week the apartment would be quite negatively geared. I would like to see out the financial year first and find out how we went as the aim was to break even.
     
  7. mandimoo

    mandimoo Member

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    All they have said in the letter is that short stay rentals are "not encouraged" and I do not know how to take this, not encouraged sounds to me like 'we don't WANT you to do it, but we cannot force you to stop'
     
  8. travelbug

    travelbug Member

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    As their letter is a bit vague "your cooperation in this matter would be appreciated" I'd send them a polite "vague" letter in response, stating you apologise for any inconvenience to other residence etc etc and that you will take their concerns under advisement etc etc.

    Maybe have a letter drafted to prospective tenants outlining the rules, how things work etc (if you don't already).

    Until you get a letter stating the exact bylaw you are breaking and asking you to stop holiday renting I'd try not to worry.
     
  9. bumskins

    bumskins Member

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    The thing is, regardless of the laws being extended to WA. Other tennants & owners have the right to "peaceful enjoyment" of their property. If they can show evidence that the noise or nuisance unreasonably impacts on their use, then they have a claim.

    After that its just s case of how far they want to push it.
     
  10. wylie

    wylie Member

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    I like travelbug's answer. Give that a try and see what happens.

    Perhaps they've sent out letters to anybody doing short term lets, and perhaps yours is not an issue, but you are caught in the "send it to everybody" situation.
     
  11. mandimoo

    mandimoo Member

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    Yes I had sent them a letter in response pretty much saying that and a few other things that maybe I shouldn't have said. I do provide my tenants with the rules for the complex, step by step instructions for literally EVERYTHING so I am not even sure that it is my tenants that they are having the problem with and I did say that to them also as I am definitely not the only person in that boat.

    Worst comes to worst I suppose we would just get a permanent tenant for a bit. The reason we went with holiday let besides the exorbitant strata fees was so that we would be able to go there ourselves, but we have only been there once and have already had it almost a year because even when it is vacant we rarely have time. I was not aware that neighbours could force anything against other property owners so that is interesting. Does anybody have any pages online to point me towards that might give some info on that kind of thing?
     
  12. westminster

    westminster P Plate Developer

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    Generally local councils are the ones who stipulate whether you can operate short term under residential zones. Short Term is more like a business and generally not allowed in residential classed buildings.

    Most will have their policy on their website, here is the City of Perth one
    http://www.perth.wa.gov.au/CPS2/amendments_to_be_finalised/Special Residential Policy.pdf

    I would say most Mom and Pop short stays totally disregard Council by laws in this matter and your strata will get shitty but might not do anything further if you send back a letter saying that you will work on the issues affecting the other tenants.
     
  13. Ausprop

    Ausprop Member

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    the council has cracked down on it dunsborough, but they allow you to apply for a zoning change and annual licence. i guess that is reasonable. my beef is.... neighbours can complain to council about the quality of short term tenants, who do I complain to about moron owners and long term tenants?

    http://www.busselton.wa.gov.au/HolidayHomes

    and

    Mayor's Blog - Holiday homes - Who do I call if there is a problem?
    http://www.busselton.wa.gov.au/node/7683
     
  14. Elliotte

    Elliotte Member

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    Well from my years with boarding houses firstly you need to understand that people are idiots. And then work from there. I did the same as you - signs EVERYWHERE, manuals for things, detailed maps, instructions...and it still didn't help. Best thing I've ever done...got a local skype phone number and forward it to a call centre in Pakistan. Now they pretty much get one instruction - call this number.

    Call centre has instructions and details and they can stay on the phone and be told step by step..okay, now use the key safe, now swipe the card, no, on the door, not the wall or whatever. It's cut down on obvious idiot problems in public at least! If you can fix that then a lot of the drama may just fade away if you book short stay people that aren't likely to party, no young screaming kids or whatever.

    Can you try a compromise- minimum stay one week or longer? One month? So it's not turnover every day? Just to tone down how much people notice.
     
  15. sanj

    sanj Member

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    That is a pretty bad attitude imo. IF (and it is a big IF) short term rentals are not allowed then you have to follow the rules. Other people have bought in the building based on it being for long term residents only, it isnt their fault that you missed it in your DD.

    A similar thing happened with the George building i think it's called (cnr of St georges Tce and victoria) a few years ago. There were heaps of people unofficially doing short term rentals and council put a stop to it.

    Yours is an unfortunate situation for sure but im not sure blaming the neighbours is fair.
     
  16. mandimoo

    mandimoo Member

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    Don't get me wrong I understand where the neighbours are coming from but of course am defensive of my use of the property as this supports our investment. I AM selective with tenants, I turn away young people, no less than 3 night stays are allowable, There are probably 4 turnovers or less per month and often times the place is vacant. I am a considerate neighbour and I do care but not at the expense of myself if you can understand that. In the building one of the long term tenants was arrested for murder last year, another guy was a drug addict in the penthouse who used to take his Harley up the lift and was horrendous, I just do not think that my short stay use anywhere near compares to the tenants that they get stuck with on long term contracts, at least if mine were bad I could call the police and have them evicted immediately as they have no right of residence at the property.

    I contacted the council and they said this :
    "It is possible to make a property zoned residential an investment property for rental. However, as to whether the permitted rental in a residential property is short or long term is potentially at the discretion of the corporate body and managing agents and dependent upon the rules of the strata body. The City does not become involved in disputes between the corporate body, managing agents and owners or residents. It is a civil matter decided between these parties."
     
  17. mandimoo

    mandimoo Member

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    Definitely not blaming the neighbors for me missing it in my DD, because I didn't! As I said we checked this all out beforehand, hence I am confused why I am receiving vague letters about it that aren't really giving me directions on what to do. Being as the strata manager decided to include the residential zoning in her letter - which did not make sense to me - I contacted the council.

    There are no strata laws, and no council laws preventing short term rental of the property. The only thing I am now concerned about is the strata deciding to vote on changing this, can this happen without full support from all of the owners? A lot of properties in the building are investor owned or holiday properties vacant for much of the year and I do not think the owners of these apartments would want to place restrictions on their properties which could dictate future use.
     
  18. mandimoo

    mandimoo Member

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    And I am joking about the heavy metal enthusiast - the point I was trying to make is that they could have had much much worse and full time also.
     
  19. depreciator

    depreciator Member

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    The high rise building in the city that our office is in was used by the Oaks hotel group for short term accommodation. They had an office in an adjacent building. Friday arvo was always a bad day with the elevators - lots of people moving in. There would have been weekend issues, too. We're a commercial tenant and we're on the third floor, so we weren't affected by it all. The permanent residents put a stop to it. There would have been blood on the floor at that body corp meeting.
     
  20. mandimoo

    mandimoo Member

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    Yuck I can imagine :( Its not an easy situation, everyone has their own interests at the top of their priority lists. There must be a way to compromise. I was wondering if maybe I could give everyone in the 3 floors immediately surrounding my apartment my phone number and they could contact me if there is a problem and I would be happy to address their concerns