Pivoting from holiday homes to longer-term rentals?

There’s no doubt that the last couple of months has had a significant impact on all businesses with the holiday rental market being one of them. Holiday house landlords around the world have seen massive cancellations and requests for refunds whilst at the same time being faced with the reality that their business model may no longer be relevant.

It’s not only international travel that’s affected, with closed domestic borders interstate holiday travel has also vanished, for now. With a lack of certainty around how long this downturn will continue, many landlords are turning to the idea of short-term leases as opposed to using their portfolio purely for holiday homes.

Pivoting to a longer-term style of tenant also brings with it further legal responsibilities to consider, but regardless of whether your tenants are holiday renters or long term, as a landlord you are still responsible for providing safe, secure and quiet accommodation.  

As we’re based in NSW we’ll stay with regulations that are relevant to landlords in our state but, it is the landlord’s responsibility to comply with all regulations in the state in which the property is based.

So what landlord implications are there when switching from holiday rentals to short-term leases? For NSW, important changes to residential tenancy laws came into force on the 23rd March 2020. These are important and you can read more about these HERE.

One important requirement that we are supporting landlords with relates to water efficiency measures. If you, the landlord, wish to pass on water usage charges then there are certain requirements to meet:

1. The property must be separately metered.
   This is logical if you consider multiple dwelling residences. It is no longer acceptable to simply divide up the water bill by the number of residences, each residence must have a dedicated water meter. Any professional plumbing company can advise and install these for you.
2. The property must meet the water efficiency measures
   In practical terms, this means that landlords are required to have each property checked at the start of each tenancy agreement to detect and fix any leaks. Toilets and taps must also be checked to ensure they are functioning correctly. Of course, a landlord must be ready to fix any defects that are found as failing to do so will mean that they cannot pass on the water-usage costs. While having a property checked costs a small amount of money, it pales into insignificance when faced with water bills that cannot be passed on to the tenants.
3. The charges to the tenant must not exceed the amount payable by you.

As a side note, from 23rd March 2025, all toilets in rented properties will need to be a minimum of 3-star rating and have a dual flush capability. These will be required to be in line with the Commonwealth Water Efficiency Labelling & Standards (WELS) Scheme.

These regulatory changes also gave NSW Fair Trading new powers to resolve any disputes between tenants and landlords when it comes to defects or needed repairs. It is the landlord’s responsibility to ensure they are compliant with all of the updated regulations. There are other considerations for landlords in NSW when considering switching to longer terms renting instead of holiday home rentals. To find out more about your obligations as a landlord you can read the landlord’s information statement as it relates to residential tenancies – Residential Tenancies Act 2010.

As a professional plumbing company, Parrish Group offers a total preventative maintenance package that is designed exclusively for landlords in NSW. This also takes account of smoke alarms, gas detection (where required) and security obligations which are also critically important whether you are holiday renting or offering longer-term leases.