Could Airbnb jeopardise our insurance?

Question 

We’re in a block of six units, one is being let through Airbnb. This is in breach of the council zoning policy, which states that no short-term leasing is allowed. If damage to the building were to happen, or a guest were to have an accident, could we have a problem with our insurance? We have a residential by-law that stops short-term rental accommodation like Airbnb and Stayz.

Answer

The by-law that prevents short-term accommodation should only be valid if it is not the owner’s principal place of residence. NSW has recently passed new legislation to say that owners corporations can adopt a by-law, by-special resolution, to ban Airbnb and Stayz only where it is not the owner’s principal place of residence.

Otherwise, it is up to the council to enforce zoning regulations. You will need to contact your broker or insurer to see if using a unit for short-term letting may impact all or part of your insurance policy by making it void.

Kemps Petersons Legal are an affordable strata specialist law firm that provides specialised by-laws services and advice. If you need further help after talking to your insurance broker and are still concerned about liability, visit them here.