If you’ve decided to establish a holiday rental property, there are quite a few laws and legal ramifications that you should be aware of.
Besides the impact on your tax return, there’s local council regulations you have to take into account and also various insurance policies you may need.
Renting out your property to short term tenants is considered a separate use than a full market lease or personal use. This means you many need to apply for consent under the Environmental Planning and Assessment Act (1979). All councils have different laws and regulations, so to avoid any unwanted fines make sure you go through your local council.
Got It Covered?
In terms of insurance, there are a few things you need to take into consideration. One is property damage, which will cover if you if any of your guests cause damage to the property.
The next is public liability, which will cover you in case any of your guests hurt themselves while on their stay.
While many people today have home and contents insurance, most insurance companies require that you notify them upon any changes to the house. This includes opening it up for holiday renting. If you don’t, this can be considered a breach of contract and you will be completely liable for all costs!
All safety precautions must be in compliance with the government standard. This means all appliances must be working correctly. There must be no exposed wires, and the water and gas fittings must be installed and working correctly.
The house must also be fitted with functioning fire alarms. If there are any extensions to the property such as a pool, spa or outdoor entertaining area, these all must be in compliance with their relative laws.