VCAT Hands Further Blow To Owners Corporation Short-Stay Control

VCAT Smashes Owners Corporation’s Short Stay Laws

short stay lawsMelbourne Owners Corporations were issued another reminder by VCAT that they cannot impose bans on short-stay apartments within the buildings they manage.

An Owners Corporation in Doncaster was taken to VCAT by an apartment owner from within the building, alleging that the Owners Corporation had gone as far as cancelling access devices to the common property to try and stop him for using short-stay platforms such as Airbnb.

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The Owners Corporation had attempted to enforce rules which prohibited short-stay leases within their building, however, the apartment owner refused to comply and continued to lease his property on short-stay platforms.

The issue came to a head when the Owners Corporation allegedly decided to deactivate security fobs associated with the lot in question to stop tenants from accessing the building.

Zheng Shem Lim, who co-owns an apartment in the building, challenged the Owners Corporation rules in VCAT.

Documents show that the Owners Corporation acknowledged that the rules it registered with the Victorian Titles Officer were, “probably invalid”, however, that did not stop the Owners Corporation from attempting to enforce them.

VCAT ruled in favour of the co-owner and further ruled that the Owners Corporation had no right to deactivate security fobs or restrict tenant access to the building, other than in emergencies.

VCAT Upholds Owners Rights For Short-Stays

The ruling serves as a further reminder that the decision to use short-stay platforms is strictly the decision of the lot owner.

The Owners Corporation can only get involved once a breach of the law or Owners Corporation rules has been committed.

That process was outlined in new laws passed by the Victoria government in late 2018.

These laws gave Owners Corporations greater powers to deal with troublesome short-term tenants and owners who fail to properly screen their tenants but stopped short of allowing Owners Corporations to ban short-stays in their buildings.

However, the new laws have not been criticised for the difficult process Owners Corporations are forced to follow to breach owners or their tenants who break the rules, and in turn do little to discourage bad behaviour.

Managing Short Stays In Your Building

Madison Marcus lawyer Elizabeth Chase told Strata Plan that while the laws were well-intentioned, they would be hard for Owners Corporations to enforce.

“The Owners Corporations Amendment (Short-stay Accommodation) Act 2018 was introduced in attempt to regulate the provision of short-stay accommodation arrangements in lots or parts of lots affected by an owners corporation by providing avenues for owners within an owners corporation to make a complaint about short-term letting guests staying in another lot,” Ms Chase told Strata Plan.

“Complaints need to be initially raised in writing to the Owners Corporation,” Ms Chase said.

“Then the Owners Corporation need to decide whether or not they are going to take action in respect of the alleged breach.

“If your Owners Corporation receives such a complaint there are a number of things you should consider before you decide what to do next,” Ms Chase said.

“First, ensure the complaint is on an approved form, second make a copy if requested and third, evaluate whether or not to take action.

“Keep in mind, the Owners Corporation must not take action under this Part in respect of an alleged breach by a short-stay occupant unless it believes on reasonable grounds that the short-stay occupant has committed the alleged breach.”

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