Tuesday, January 11, 2022

Return to listings

Short-Term Rentals in Strata Complexes: How to Limit Your Risks

Until the early 2000s, short-term accommodation was primarily offered via hotel chains and commercial providers. In recent years, platforms such as Airbnb, Stayz, AirKeeper, Made Comfy, and Hometime have transformed this space, enabling individuals to rent out their own properties directly to consumers and earn additional income in the process. However, renting out strata properties for short-term stays comes with its own set of risks for lot owners and strata managers alike. To help, this article examines some of the key exposures and practical ways to help lessen them.

There is a range of risks associated with short-term rentals within strata properties. The main risks include:

LIABILITY – increased foot traffic within strata properties can mean a higher chance of accidents/injury occurring, damage to personal property in common areas, and resulting claims.

PROPERTY DAMAGE – wear and tear from short-term tenants can contribute to the cost of the building’s upkeep, common amenities, and common property utility bills, all of which can result in increased strata fees.  

SECURITY –  guests coming and going from strata buildings means anyone can gain access to the complex. Keys that are left in drop boxes can be copied and there is a higher risk of theft and/or vandalism.

MALICIOUS DAMAGE, THEFT, & VANDALISM – a standard home and contents policy will not cover malicious damage caused by short-term renters. This applies to the unit being rented out and any common areas within the strata complex.  

Despite the risks, a little forward planning by lot owners and strata managers can significantly minimise these exposures.  

LOT OWNERS: How to reduce your risk and limit damage

  • Inform your broker. Short-term rental accommodation is classified as a commercial activity, so a residential insurance policy will not always be sufficient. Therefore, it is always best to check with your broker to ensure your insurance policy is tailored to your short-term rental requirements. This could include home building insurance, home contents insurance, and general liability insurance.
  • Consider installing security cameras in common areas and near key drop areas. If your property is overseen by a strata manager, you can speak to them about this. Be sure to change drop box codes regularly.  
  • Remove all valuable and sentimental items from your property when guests are present.
  • Request the payment of a bond prior to guests’ arrival and return the bond after everything has been checked following their departure.  


Minimise risks associated with short-term rental accommodation  

  • Inform your broker about any short-term letting within the complex to confirm the appropriate insurance policies are in place.  
  • Maintain contact with lot owners who are renting out their units to make sure all legislative requirements are being followed by owners and guests.  
  • Ensure common areas are always well-maintained. This requirement forms part of the terms and conditions of the policy. Failure to do this could impact the insurer’s ability to respond to claims.


Feel free to reach out at any time to discuss your situation. You can either contact your broker directly or follow this link to find a Honan contact near you.  

Prepared by Sharna Hoogenboezem.

Strata Insurance Costs: Where Does Your Money Go?

Return to listings