Case law update – Owners Corporations and Short Stay Businesses.

Tisher Liner FC Law acted for the owners corporation of a residential apartment complex in Southbank which has successfully obtained Victorian Civil and Administrative Tribunal (“VCAT”) orders confirming a short stay business operating in their building was in breach of their owners corporation’s rules and must cease. VCAT has confirmed that short-term stays and serviced apartments breach owners corporation rules which prohibit the use of residential apartments for any business. The orders are the first of their kind and may prompt other owners corporations to take similar action.

The VCAT orders come at a time when tensions between residential owners corporations and short-term stay operators are high and the legal powers of the Local Councils to intervene to stop short-term stays are currently unresolved. The Watergate short-term stay case in 2013 involving the City of Melbourne’s powers to stop short-term stays in residential buildings by issuing building orders has been sent back to the Building Appeals Board for re-hearing. The City of Melbourne has made its opposition to short-term stays in residential apartments clear. However, the case may take many more months to resolve and may not achieve the desired result.

Owners corporations should check their rules and consider whether their rules should be updated to prevent short-term stay businesses causing issues for their buildings. Owners corporations should obtain legal advice on their options to stop short-term stay businesses operating in their building.

For more information please contact a member of our Owners Corporation Team.