1. Air B’N’B/
Stayz/the short term rental industry in general have attracted considerable
media attention in Victoria and Australia over the last several years.
2. Attempts to curb
the ability of apartment owners/tenants to let their property out by short-stay
accommodation arrangements had proved largely unsuccessful in the Victorian Building
Appeals Board, Victorian Civil and Administrative Tribunal, the Victorian Supreme Court and the Court of Appeal. For example, see:
Owners Corporation PS 501391P v Balcombe [2016] VSC 384, an appeal to Riordan J from VCAT, which
concluded that Owners Corporations could not prohibit short term leasing. See
also Genco & Anor v Salter & Anor
[2013] VSCA 365, an appeal to the Court of Appeal from (originally) the
Building Appeals Board, relating to an attempt by the City Of Melbourne to
allege that the use of apartments for short stay arrangements was a breach of
the Building Code.
3. However, see Swan
v Uecker [2016] VSC 313 in which the landlord was actually successful,
arguing the tenant was in breach of the lease by sub-letting to ‘Air B’N’B.
4. I wrote a 3 part
blog about this issue in August 2016 (see: https://melbournepropertylaw.blogspot.com/2016/08/).
5. In late 2018,
the Victorian Labor Government introduced amendments to the Owners Corporations Act, 2006 in an
attempt to give Owners Corporations the power to regulate these types of
arrangements. Act No 34 of 2018 received Royal Assent on 14 August 2018. The
Act came into effect on 1 February 2019.
6. Among other things, the Act establishes
a complaints procedure relating to short-stay accommodation.
7. The new provisions
purport to allow complaints to the relevant owners corporation about a breach by a
short-stay occupant of the conduct proscriptions applying to short‑stay
accommodation arrangements.
8. The relevant conduct proscriptions include —
a. Unreasonably
creating noise likely to interfere substantially with the peaceful enjoyment
of another lot;
b. Behaving in a manner likely to interfere unreasonably and substantially with the peaceful enjoyment of another lot;
c. Using a lot or the common property so
as to cause a substantial hazard to the health, safety and security of any
person or an occupier;
d. Unreasonably and substantially obstructing
the lawful use and enjoyment of the common property by an occupier or a guest of an
occupier; and
e. Substantially damaging or altering a lot
or the common property, intentionally or negligently.
Action
9. If an owners
corporation decides to take action in respect of a complaint, it:
a. Must give notice in
writing, specifying the alleged breach and stating that the breach must be rectified;
and
b. May apply to VCAT
to resolve a short-stay accommodation dispute in relation to the breach.
10. Under the new
Section 169, VCAT may make any order it considers fair including one or more of
the following orders—
a. A prohibition order
under section 169D (preventing the future use of the premises for short term
accommodation arrangements);
b. A loss of amenity
compensation order under section 169E;
c. An order for a
civil penalty not exceeding $1100 under section 169G; and
d. Any applicable
order that VCAT may make under section 165.
11. The owners
corporation must report to the annual general meeting in relation to the number
of complaints made; the nature of the complaints; the number of matters on
which action was taken under this Division; the nature of the matters in
respect of which action was taken; and the outcome of each action.
12. It will be
interesting to see how successful the amendments are.
13. I believe there
are some relatively large scale short stay operators in Melbourne, whose
businesses may be affected (severely) by the legislation, and as a result who
may attempt to overturn the legislation as unconstitutional. For example, there
does not appear to be any compensation available to those operators whose
businesses are severely impacted by the amendments to the legislation.
WG Stark
Hayden Starke Chambers
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