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Government releases short-stay panel report

13 Aug 2015

Government releases short-stay panel report Image

By Bethany Williams

The State Government has released recommendations made by an independent panel examining short-stay residential apartment letting, but is yet to announce any reforms.

Under the panel’s recommendations, short-stay operators would be held responsible for parties held in apartments they let.

The majority of the seven-person panel agreed that the appropriate regulatory approach would be to:

  • Make providers of short-stay accommodation responsible, to a limited extent, for such parties in the apartments they let; and
  • Empower owners’ corporations (OC) to deal with the problem using existing powers, prescriptions and processes under the OC Act.
  • According to the report prepared by the panel, the five members who supported this approach recommended that:
  • OCs be empowered to serve a “notice to rectify breach” on providers of short-stay accommodation regarding breaches of the OC rules by occupants; and
  • In determining disputes based on such breach notices, VCAT be given the power to prohibit the use of apartments for short-stay accommodation for a specified period or until the apartment is sold.

The panel also recommended that this regulatory action be complemented by self-regulation through the implementation of the Holiday Rental Industry Association’s Holiday Rental Code of Conduct.

The short-stay ministerial advisory committee was formed in February by Consumer Affairs Minister Jane Garrett and was asked to make recommendations to  herself and Planning Minister Richard Wynne.

The group comprised various stakeholders from the City of Melbourne, the Victorian Tourism Industry Council, the Holiday Rental Industry Association and Strata Community Australia’s Victorian division.

Docklands Community Association president Roger Gardner was also on the panel, along with Docklands short-stay operator and president of the Victorian Accommodation Industry Association, Paul Salter.

Under its terms of reference, the panel was required to examine the short-stay accommodation issue in residential apartment buildings and recommend ways to improve regulation to protect properties from “unruly” parties.

Meeting six times between March and May, the group considered 13 options for reform.

It was required to identify and examine options for addressing the issues that maximised the amenity of apartment buildings but minimised divisiveness within OCs, interference with property rights and negative impacts of Victoria’s tourism industry and the Victorian economy.

Research included in the panel’s report revealed that a January 2014 report prepared by BIS Shrapnel estimated there were 169,073 short-stay properties in Victoria (27.12 per cent of the national total) and the industry supported $31.4 billion in economic activity and 238,000 jobs nationally.

Accordingly, the panel estimated the short-stay accommodation industry in Victoria represented a multi-billion industry and supported over 500,000 jobs.

Options for reform considered by the panel included:

  • Prohibiting short-stay accommodation (stays of less than 30 days) in apartment buildings under the Building Act 1993 or the Planning and Environment Act 1987;
  • Self-regulation by the industry through implementation of the Holiday Rental Industry Association’s Hotel Rental Code of Conduct;
  • Alternative dispute resolution and mediation options to manage tensions between residents and short-stay apartment owners;
  • Strengthening the powers of OCs under the OC Act 2006 to deal with the conduct of short-stay occupants;
  • Amending the OC Act 2006 to allow OCs to make rules prohibiting or restricting short-stays; and
  • Amending the OC Act 2006 to make apartment owners liable for the conduct of their short-stay occupants.

Not all panel members agreed with the final recommendation.

According to the panel’s report, Mr Gardner considered banning short-stay accommodation in residential apartment buildings to be the best approach.

In contrast, the director of the Holiday Rental Industry Association, Justin Butterworth, believed that a regulatory approach was unnecessary and recommended industry self-regulation.

The panel’s report noted the difficulty in forming a recommendation that met all criteria in the terms of reference. It recommended further consultation with industry and residents before any regulatory change occurs.

According to a spokesperson for Ms Garret, both ministers are currently considering the recommendations made by the panel and will be consulting further with the industry before announcing changes.

Ms Garrett said the Government was working to introduce a common-sense, long-term solution to the problem, that fostered tourism but also protected neighbouring residents.

“We have to find the right balance,” Ms Garrett said. “Short-stay accommodation is a popular option for travellers coming to Melbourne, but it shouldn’t impact on people’s quiet enjoyment of their homes.”

Mr Wynne said: “Our thriving apartment market means we have to make sure policy and legislation keeps pace with the changing ways people live and use their homes.”

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