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By Alistair van Schalkwyk, director of ASCO Legal in Howick A recent High Court case, Cameron Drive Management Company Ltd v Jo-Ann Real Estate Ltd [2025] NZHC 721, has clarified whether homeowners can rent out properties via Airbnb in subdivisions that restrict “commercial activity”. In this case, a homeowner occasionally rented their holiday home on Airbnb. Other residents argued this breached a land covenant prohibiting commercial activity, except for “private homestays – provided these did not affect the neighbourhood’s character or privacy. The central question was whether short-term Airbnb rentals, where the owner is absent, constitute prohibited commercial activity. The court found that while Airbnb hosting is a commercial activity, it did not breach this specific covenant. The reasoning was that the business aspects, booking and payment, occurred online, not on the property itself. Guests simply stayed at the house, similar to any other occupant. The court distinguished “private homestays” (allowed by the covenant) as situations where the owner is present and actively hosts guests. Airbnb-style rentals, with the owner absent, did not fit this model. However, because the owner was not running a business from the property during rentals, there was no breach. This decision highlights the importance of interpreting land covenants based on their wording, intent, and historical context. Prospective buyers in subdivisions with covenants should seek legal advice to fully understand restrictions and how they may impact property use. Get in touch with ASCO Legal for clear, practical advice. To contact ASCO Legal, phone 09 308 8070, or see www.ascolegal.co.nz.
