Designed as a select gated community near Taupo’s Acacia Bay, the Cameron Drive development looked to keep out rowdy renters by prohibiting any commercial activities other than private homestays. This prohibition does not block use by Airbnb customers, the High Court ruled, in what is a win for Napier-based rental management company Jo-Ann Estate Ltd.
Online renting platforms such as Airbnb did not exist in 1999 when the fourteen-lot subdivision was established. Subdivider Bruce Bartley told the High Court a restrictive covenant was lodged on title to each lot with the intent properties could not be rented out, but homestay guests permitted.
Justice Lang was asked to rule whether Jo-Anne Estate’s practice of having clients who booked through Airbnb staying at its Cameron Drive property, without owners being present, breached this restrictive covenant.
Historically, a homestay sees guests using part of the property whilst owners remain in occupation, Justice Lang said.
In contrast, Airbnb clients are usually given rights to occupy an entire property for the period booked. Airbnb is probably best viewed as a short-term licence to occupy, rather than a short-term lease, Justice Lang said.
Key wording in the Cameron Drive restrictive covenant blocks owners from carrying on ‘any commercial activity [other than private homestays] from the dwelling.’
Justice Lang read the key words narrowly.
An Airbnb booking is not being made ‘from’ the property; it is an online commercial transaction concluded elsewhere.
Outcome of this online commercial transaction sees guests subsequently occupying Jo-Ann Estate’s property, but this Airbnb occupation, by itself, is not a breach of the restrictive covenant, Justice Lang ruled.
This ruling mirrors similar decisions made in UK residential property disputes.
Cameron Drive Management Company Ltd v. Jo-Ann Estate Ltd – High Court (31.03.25)
25.095