A ruling banning a Christchurch Airbnb unit from offering visitor accommodation is likely to send shockwaves through the short-term rental sector.

In a decision that could affect thousands of properties across New Zealand, the Ministry of Business, Innovation and Employment (MBIE) has ruled that a unit in the central city’s east frame housing area does not meet Building Code standards for guest accommodation.

Like most homes, it was built to comply with rules for a residential dwelling, not the stricter rules for guest accommodation which apply to motels, hotels and hostels.

The differences relate mainly to access for people with disabilities, and fire regulations.

The Gloucester St unit was built by housing developer Fletcher Residential in the Gloucester Green complex near the Margaret Mahy playground.

An MBIE decision on a unit in this complex in Gloucester St, Christchurch, could have nationwide implications for the short-stay guest accommodation sector. An MBIE decision on a unit in this complex in Gloucester St, Christchurch, could have nationwide implications for the short-stay guest accommodation sector. Photo: KAI SCHWOERER / THE PRESS MBIE’s ruling says the property owners must either make significant alterations to the apartment or no longer use it for Airbnb or other short-term rental platforms.

It released the ruling after being approached by Christchurch City Council seeking clarification of the issue, following a complaint from a member of the public.

Asked about the implications of the ruling for property owners, a council spokesperson said it would be inappropriate to comment while an appeal period remains open, although the council will not be appealing.

Read more: Nearly 500 new homes in CBD but only 50 new residents An MBIE ruling can only be appealed through the courts.

Council figures indicate that of the 500 new central Christchurch homes built in a year, most are being used for short-term guest stays.

Anthony Brien, associate professor of hotel and business management at Lincoln University, said the MBIE ruling had widespread national implications.

Lincoln University associate professor Anthony Brien says councils should be very concerned. Lincoln University associate professor Anthony Brien says councils should be very concerned. Photo: BEJON HASWELL/ STUFF “Councils should be very concerned. This determination is fair and appropriate, based on the evidence presented, and it does set quite a strong precedent.”

Building codes are about keeping people safe, Brien said.

“Now that the (Christchurch City) council knows, they have to act. If someone in an apartment has an accident or there is a fire, the council will be in a very difficult position”.

He said a register of short-stay visitor platforms was needed, as is done in Europe.

“Otherwise how are they going to know what people are doing? Are they going to stand outside the door?”

A spokesperson for Fletcher said all the company’s east frame homes, including those in Gloucester Green, are developed under the residential building code.

The Gloucester St units have only recently been completed. The Gloucester St units have only recently been completed. Photo: KAI SCHWOERER / THE PRESS “Our internal sales team actively engage with our purchasers to reinforce this, and it is clear in the sales and purchase agreements for these developments that the homes are designed to be permanent residences and are not appropriate for transient accommodation,” the spokesperson said.

“Owner-occupiers are our primary customers, and our developments are planned and designed with the needs of long-term residents at their core.”

The body corporate chair of one large Christchurch complex with both full-time residents and Airbnb-type owners said they still need to get to grips with the implications of the ruling.

He said most units could probably not be easily altered to the higher standards.

Airbnb and similar platforms advertise short-term rental accommodation. Airbnb and similar platforms advertise short-term rental accommodation. Photo: 123RF.COM The chair, who did not want to be named, said most people thought a resource consent allowing a home to be used as an Airbnb was sufficient.

“But this is under a whole different law. There will be a ton of properties operating as short-term rentals that don’t comply.”

The city council and many other councils require owners using a residential property for short-term accommodation for more than 60 nights a year to obtain a resource consent.

Matthew Horncastle, co-owner of Williams Corporation which is the city’s biggest builder of units and obtains short-term rental resource consents for many of its complexes, said the MBIE ruling is an overreach and should be challenged.

Williams Corporation co-owner Matthew Horncastle believes the MBIE ruling does not follow the law. Williams Corporation co-owner Matthew Horncastle believes the MBIE ruling does not follow the law. Photo: Iain McGregor / The Press “My gut feeling is, MBIE just doesn’t understand what they are ruling on. It’s an example of a Government department being out of touch with what the market is doing.”

Horncastle said rules that made sense for hotel construction do not necessarily make sense for individual units.

The company intended to write to the ministry to seek clarification, he said.

“We don’t think the Government is following the law. They need to respect private property, leave us alone, and go back to Wellington.”