Short stay online accommodation services such as Airbnb and Stayz, do not enjoy universal acceptance.  The alleged behaviour of some guests have seen attempts to control their activities, with mixed results:

  • Councils alleging apartments used for short term commercial accommodation breached the Building Code of Australia.  This was rejected by the Courts.
  • Altering the Owners Corporation rules to try and outlaw “short stay” use of apartments.  This was declared invalid by the Courts.
  • Claiming the tenants on-hiring of the property through Airbnb was a breach of the lease.  On the facts of that case, the landlord’s action was successful.

Short stay online accommodation services provide too great a benefit to the Victorian hospitality and tourist industry to see them banned.  In an attempt to placate some of the concerns raised about a lack of regulation, the Victorian Government established an independent panel in 2015 to recommend ways to improve occupants’ behaviour in CBD residential buildings.  As a result of the panel’s report, there is currently before the Victorian Parliament the Owners Corporation Amendment (Short Stay Accommodation) Bill 2016.

The Bill intends to give lot owners, occupiers and the manager a mechanism to deal with short stay tenants if they breach prescribed standards of conduct.  The Bill defines a short stay as a maximum of 7 days and 6 nights.  The Bill is not limited to CBD buildings but will only apply if the property is a lot affected by an Owners Corporation and is in a multi storey residential building.  Single storey or stand-alone buildings affected by an Owners Corporation are not covered.

The Owners Corporation can serve a notice and then a final notice on the lot owner and the short stay occupants. If the breach is not remedied the Owners Corporation can make an application to VCAT. 

Lot owners in breach may face:

  • a fine of $1,000; and/or  
  • an order prohibiting use of a lot for short stay accommodation for a period determined by the tribunal. 

However, a prohibition order can only be granted if a breach notice has been served on the lot owner on 3 or more separate occasions within a 2-year period. 

Aggrieved apartment occupiers that live in the same building can apply to VCAT for a compensation order of up to $2,000.00 by first making a complaint to the Owners Corporation who must then decide whether or not to pursue the complaint.  If the complaint is pursued, a notice and final notice must be served before the application for compensation can be lodged at VCAT.

The difficulty with the proposed legislation in its current form is that each notice allows the person served 28 days to rectify the breach.  Given the nature of short stay accommodation it is likely that the breach will be rectified within the time frame of the first notice. 

If you have any questions on the proposed new legislation please contact:

Stuart Monotti
Special Counsel
03 5226 8514
smonotti@ha.legal

or

Ashlea DeBono
Lawyer
03 5226 8587
adebono@ha.legal