The short-term accommodation market, including renting property through platforms like Airbnb and Stayz, has proved lucrative for many property owners in NSW. Sydney ranks as one of Airbnb’s top 10 cities for most properties on the platform and NSW accounts for about half of the $31.3 billion the short-term industry was estimated to be worth nation-wide in 2016.
Changes to legislation introduced in June 2018 placed a 180-day cap on the number of days a property can be rented out by Airbnb in Sydney and introduced the power for strata corporations to ban Airbnb in their buildings if 75 per cent of owners agree.
Now, the NSW State Government is proposing to introduce a regulatory framework around short-term rental accommodation (STRA) later this year. The framework incudes a mandatory code of conduct, new planning instruments and possible registration of all STRA properties.
The Minister for Better Regulation Kevin Anderson said: “The mandatory Code of Conduct will facilitate oversight of STRA providers, including providing for the resolution of complaints and disputes regarding the conduct of hosts and guests”.
Hosts will be obliged to hold an appropriate level of public liability insurance and provide neighbours and owners’ corporations with information such as the host’s contact details. Guests will have to ensure their behaviour does not unreasonably impact neighbours and will be required to take reasonable care of the property.
Hosts or guests who commit two serious breaches of the code within two years will face a five-year ban, while platforms and letting agents will be prohibited from offering the service to any person or dwelling listed in the exclusion register.
With host obligations specifically mentioning the need for public liability insurance, it’s an opportune time for anyone operating in this market to check they have the right insurance.
Any owner renting out their property short-term – as a standard holiday let, corporate lease, serviced apartment or through a share accommodation platform like Airbnb – should take out a landlord insurance policy specially designed for the short-term market.
In addition to providing cover for damage to the building (if applicable), a short-term policy should offer comprehensive contents cover for items like game consoles, entertainment equipment, linen, crockery and cookware. It should also cover damage caused by tenants, their pets or guests, whether the damage is accidental or malicious. Importantly, the policy should provide liability cover in case a tenant/guest is injured on the property.
For these NSW landlords, having the right short-term accommodation insurance with EBM RentCover saved them thousands…
Claim one – $5K in malicious damage
A guest booked the property last minute for two nights and checked in. On the day the guest was supposed to check out, the guest couldn’t be contacted. The complex receptionist found the apartment trashed with damaged wall paint, broken contents (plates, bowls, glasses), smashed shower screens, smashed glass table on the balcony, burnt linen, and damaged flooring from the glass and burnt items. The guest also took the keys when they left. Police were notified and attended the property. EBM RentCover paid the $2,020 cost to replace the broken inventory items and burnt linen, replace the flooring and glass table, and re-paint the walls (the damage to the shower screens and replacement keys and locks was referred to the building insurer). The landlord was also able to claim $3,176 for loss of rent, calculated on a daily rate basis, until the repairs were completed.
Claim two – $4.5K loss of rent
A guest noticed the gas supply had stopped working. An emergency plumber was called to the property and found there was a water leak which had damaged the gas supply line. Although the damage to the gas line was not covered by the policy (which was for short-term contents only), the damage had resulted from an insured event and the property couldn’t be let without gas supply. EBM RentCover paid the $4,610 loss of rent claim, which covered bookings that had to be cancelled and the days where rent was lost until repairs were completed.
Claim three – $15K in liability
A guest went to hang washing on the line. The path to the washing line was old railway sleepers embedded in the ground and one of these was apparently uneven. The guest was wearing high heels at the time and lost their balance and broke an ankle. A $15,000 claim was paid for the guest’s medical costs and lost earnings.
These claims illustrate the value of having the right short-term insurance policy. At EBM RentCover we offer reliable solutions to help landlords feel confident they are well protected by insurance.
