Newcastle council has condemned behaviour at a luxury weekender, but a court has overturned a council refusal

A group of men and one barely-clad woman arrived at a luxury Hunter weekender not so long ago, but neighbours say they weren't there just for the ocean views.

There was partying on the back deck and in the spa until late that night. By the following day the woman was on the deck naked - apart from a sex toy strapped to her waist.

The Beach House at Merewether is billed as "the perfect holiday experience", where guests pay an average $1000 for a night, or an advertised $9135 in 2018 for the Supercars package.

But neighbours of the John Parade property, including a number of prominent Novocastrians, and others in a nearby street have told different stories to Newcastle council that were later raised in court.

There was the wedding party that returned to The Beach House after 2am and partied on. There was a fight that night that left neighbours picking up discarded bottles thrown into their yards, and smashed glass in the street.

Luxury: Merewether's The Beach House has been listed online as a luxury weekender with ocean views since December, 2016, but its path to development approval via the Land and Environment Court has been stormy.

Luxury: Merewether's The Beach House has been listed online as a luxury weekender with ocean views since December, 2016, but its path to development approval via the Land and Environment Court has been stormy.

There was the incident described as "blow job night" in a complaint letter to The Beach House's owners in 2017, where a group of women sitting in the spa regaled each other with stories about their sexual prowess - every word clearly heard in the bedrooms of two girls, aged 9 and 14.

Or a notorious weekend that led to Newcastle council compliance action in 2017, where guests partied and engaged in extremely loud "sexual activity" on the back deck until 3am before retiring, only to resume festivities three hours later.

"We ensured the children could not see what was occurring, but there was no way we could prevent them hearing it," said a neighbour's complaint letter to The Beach House owners Adam Sherman and Amanda Rose.

"We regularly witness binge drinking and group sex on the back deck of your holiday rental (which) is typically accompanied by loud voices and foul language."

But despite complaints from residents; despite a history that includes opening its doors to guests in December 2016 without the appropriate consent, and despite the council's strong objections, The Beach House has won an appeal to continue operating, with tighter restrictions.

But Land and Environment Court Commissioner Danielle Dickson acknowledged new conditions might not protect neighbours from incidents in future.

The spa and backyard deck at The Beach House.

The spa and backyard deck at The Beach House.

There is "no certainty that adverse impacts will not occur to the residential amenity of the surrounding residents", she said after overturning a council refusal and approving The Beach House as tourist and visitor accommodation in a decision last week.

But the risk of more noisy sex on the deck at 3am, more fights, more cars parked across the footpath, more swearing, excessive drinking and anything covered by the phrase "antisocial behaviour", needed to be balanced against the fact the use is permissible, neighbours were told.

And a search of "getaway" property websites showed another 21 properties listed within two kilometres of The Beach House, Commissioner Dickson said.

We ensured the children could not see what was occurring, but there was no way we could prevent them hearing it.

Neighbour complaining about "sexual activity" on the back deck at The Beach House.

Online advertising platforms such as Airbnb had made it "much easier for property owners to let their properties, whether their principal place of residence, an empty beach house or an investment property, for short term occupation", leading to a "rapid growth" in the tourist and visitor accommodation market across the state, she said.

But Newcastle council said the findings in The Beach House case gave significant weight to changes proposed by the NSW Government that would introduce a planning framework for the management of short-term rental accommodation.

"The proposed framework includes possible sanctions for hosts or guests who commit serious breaches of a code of conduct, with NSW Fair Trading playing a policing role," a council spokesperson said in a statement that condemned the "inappropriate behaviour" described to the court.

The council is considering an appeal.

Ms Rose and Mr Sherman said they bought the cottage next to their home as "the only traditional beach house remaining on John Parade".

"We had a vision to restore it to create a modern holiday accommodation while respecting the style and shape of the original cottage. We spent about the entire year in 2016 working onsite every day to bring our vision of the perfect holiday experience to life," they said.

But there were problems.

The Building Professionals Board investigated a professional conduct complaint after a private certifier issued a complying development certificate (CDC) for The Beach House renovation works, despite not having accurate detailed plans and documents for the proposed development.

The board admonished the certifier in March but took no further action. It advised him that a development certified without relevant information could mean "difficulties for the local council when seeking to enforce compliance and for future owners and neighbouring residents as to what has been approved".

A bedroom at The Beach House with spectacular views of the ocean.

A bedroom at The Beach House with spectacular views of the ocean.

Newcastle council initiated compliance action against The Beach House owners in September, 2017 after complaints about an incident involving extremely loud "sexual activity" on the back deck and spa area until 3am.

The council also required the owners to lodge a development application to operate as tourist and visitor accommodation, more than nine months after The Beach House was listed on Airbnb and had started taking paying customers.

In October, 2017 a consultant for Ms Rose and Mr Sherman acknowledged development consent was "necessary", but argued for approval because The Beach House "contributes to the economic and social success of Newcastle".

"By providing luxury accommodation in a prominent beachfront location along Bathers Way the site actively promotes Newcastle as a key tourism destination," the consultant said.

It said no extra parking was required, there would be "no parties or events", visitor numbers in the three-bedroom house would be capped at 10 and guests would be "reminded to keep noise to a minimum after 10pm and be respectful to neighbouring residents".

Newcastle council refused the proposal, saying it operated as a serviced apartment which is a use prohibited in the low density residential zone.

Ms Rose and Mr Sherman appealed to the Land and Environment Court. They argued The Beach House was not a serviced apartment, but despite not fitting neatly into any "tourist and visitor accommodation" categories, it was still a permissible use like a hotel, which is permitted in the zone.

Commissioner Dickson rejected the council's "serviced apartment" argument, in part because guests, and not The Beach House owners, are responsible for cleaning during their stay, whether for one night or several months.

"As the guests will be carrying out their own cleaning during their stay, I believe the proposed development does not comply with the definition of 'serviced apartment'," the commissioner found.

Newcastle council argued The Beach House generated excessive noise, potential and actual antisocial behaviour and parking problems. It has been rented for 377 nights since it was first listed, and three groups have been evicted for breaching house rules.

While the sharp rise in online short stay holiday letting in NSW has been a hit with consumers, it has also left a trail of unhappy neighbours and local councils struggling to regulate their use.

One Beach House neighbour said he was woken at 2am one weekend because more than 40 people were on the property, and the next morning "drunken tenants" swore at walkers on Bathers Way, and particularly women. A prominent John Parade resident said he had reported a number of incidents to police. Proposed measures to reduce negative impacts were "hopelessly inadequate".

A nearby unit block owners corporation wrote of problems with owners advertising units on Airbnb without the knowledge or consent of other owners. Even "carefully vetted" guests who appeared without notice were "indifferent to other residents", were "non-responsive and aggressive" if challenged, drank to excess and engaged in behaviour including, on one occasion, urinating as a group off a balcony, the owners corporation said.

Ms Rose told the court the screening process had "become more strict over time as we started asking more detailed questions about the purpose of the stay".

In a response to questions Mr Sherman said the court decision had been "a win for commonsense".

"We decided to take this case to the Land and Environment Court because we didn't believe we had done anything wrong, we knew that we were operating in a very ethical and responsible manner, and we wanted a neutral body to hear all facts of the case," he said.

Newcastle Herald