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How to Get Body Corporate Permission Before Renting Out Your Home to Short-Term Guests

“A body corporate is a necessary evil when it comes to owning a property in a subdivided arrangement.

Whether it’s an apartment block or subdivided semi, when there are multiple property owners involved in making decisions about a property it is often essential to have a managing body who can coordinate important decisions and aspects of property ownership.

Unfortunately, as the property owner, this setup can become limiting. For example, you need to run all major decisions about your property through the body corporate, and they will make a decision about your request with regards to all of the other property owners who have a vested interest in the subdivision.

An example of where this may be limiting is if you are looking to rent your property out to short-term guests in an attempt to increase your rental yield. Given the relatively new nature of short-term renting, many body corporates have outdated and restrictive policies about letting this happen.

To help you get permission from body corporate to host short-term guests at your property, we have put together this step-by-step guide. Enjoy!

Note: In HUGE news that is shaping the rental market in Australia, Fair Trading modified its Strata living handbook to warn strata committees and owners corporations from passing by-laws that restrict holiday letting.

Step 1. Read your contract

When deciding to rent out a home or apartment to short-term guests, it’s important to read your body corporate agreement very carefully.

Many body corporate agreements have stipulations that prevent owners from renting their property on a short-term basis. If your agreement has this restriction on it, it’s unlikely that you’ll be able to rent out the property without causing yourself problems.

In some cases, a body corporate agreement will state that it can only be done with permission.

Either way, before you move the process forward it’s best to read your contract and know what you are up against.

Step 2. Gather the information you need

Before approaching your body corporate to ask if you can rent your apartment out to short-term tenants, you need to gather all of the relevant information that they may be looking to see.

One approach that can be quite effective is to help the body corporate understand how you will vet potential short-term guests before letting them stay at your property.

Some things to consider could be:

  • – Only advertise the property on reputable short-term rental websites with real reviews.
  • – Accept short-term rental guests dependent on their rental history and a baseline of positive reviews from other owners.
  • – Use a short-term property management service who are experienced in placing trustworthy tenants in short-term properties.
  • – Take additional security measures with keys such as using smart locks.
  • – Put insurance in place that will protect the property and common areas in case of malicious damage and liability. At MaisonNets we are lucky enough to partner with Westpac insurance to cover our clients!

https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2Fmaisonnets%2Fposts%2F2034054410210326%3A0&width=500Note about insurance:

Short-term landlord cover is important and not many insurers provide it. The cover will be for landlord contents, malicious damage by tenants, loss of rent (providing bookings can be substantiated), and liability cover.

The cover can also be provided for the head tenant (used as short-term) and provides all the landlord protection, plus $50,000 malicious damage cover to the building, which is a big selling point to the body corporate.

Body corporates will very often use insurers that deem short-term rentals accommodation as commercial usage. This may be one of the reasons put forward to restrict the use of a property as short-term accommodation.

At MaisonNets we have access to strata insurers who view short-term as residential and will cover you under the residential strata cover.

Step 3. Present your case to body corporate

Once all the documentation is in place, it’s time to share it with your body corporate. At this stage, you should have enough documentation to reduce any risk on behalf of the body corporate.

It’s important to be thoughtful when you approach them. Write a letter detailing the process you will go through when renting out the apartment, using the information you have gathered in the previous step. Reinforce that you will be responsible for the tenant’s actions who are renting the property, and remove any foreseeable risk in the eyes of the decision maker.

It’s a good idea to maintain strong communication with your body corporate throughout the whole process – before, during, and after you have rented out your property.

It may also be helpful to educate body corporate about the opportunities that come with short-term rentals, and how it can attract more investment in the area, driving up property prices for other owners.

A different way to look at things

Instead of approaching body corporate, you could approach the landlord and suggest a “head-lease” arrangement. In this scenario, you offer to sublease the apartment as a short-term rental and guarantee an income for the landlord and the person handling the head-lease. This income is typically higher than a long-term rental agreement, which is attractive to all parties involved.

Wrapping up

At the end of the day, short-term rental investing is a growing trend and one which many property owners are using to increase their rental income and pay off debts. While there are still some body corporates who are against this movement, most are coming around, and we expect this trend to continue. So even if your body corporate is against short-term rentals, for now, bide your time and present the above information to them when the opportunity arises.”