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OCs ‘betrayed’ on short-stays

09 Jun 2016

OCs ‘betrayed’ on short-stays Image

By Shane Scanlan and Sean Car

The State Government has abandoned residents hoping for intervention to regulate the use of residential apartments for short-stay accommodation.

It has introduced into Parliament amendments to the Owners’ Corporation Act, which place the responsibility for policing unruly behaviour on neighbours.

Under the new laws, individual neighbours and owners’ corporations (OCs) will be expected to seek redress from guests and owners of offending apartments at the Victorian Civil and Administrative Tribunal (VCAT).

A government press release says: “Under the reforms, for the first time apartment owners could be liable for any damage, noise or loss of amenity caused by their guests.”

“VCAT would also be given new powers to award compensation of up to $2000 to neighbours, and ban short-stay apartments which are repeatedly used for unruly parties.”

“Guests could face fines of up to $1100 for a range of conduct breaches, including: creating unreasonable noise or behaving badly; causing a health, safety or security hazard; damaging common property; and obstructing a resident from using their property.”

“Short-stay apartment owners may be ordered to pay neighbours’ compensation and any damage caused by their guests to common property.”

The OC of Kings Park at 38 Wells St in Southbank notably claimed a landmark victory against a short-stay operator at VCAT in 2014, which ruled that the operator had breached OC rules and must cease operating at the complex.

Responding to the government’s new laws in a letter addressed to Member for Albert Park, Martin Foley, Kings Park resident Wendy Beech said the new rules would not work.

“Apartment owners, or an OC, aren’t going to go to VCAT (costly exercise) for a penalty of possibly $1100 being imposed on the offenders,” she wrote.

“The short-stay clients will be gone and the owner of the offending apartment will write off any $1100 penalty.”

“When my husband and I purchased our apartment 22 years ago, we bought into a residential complex, not a commercial establishment.”

“There needs to be a distinction made between residential and commercial dwellings.”

Ms Beech told Mr Foley that she believed the crux of the whole short-stays problem lay within the regulations outlined in the Building Code of Australia, which states that:

  • Class 2 Building is a residential building containing two or more sole-occupancy units each being a separate dwelling; and
  • Class 3 Building is a residential building other than a Class 1 or 2 building, which is a common place of long-term or transient living for a number of unrelated persons, e.g. boarding-house, hostel, backpackers accommodation or residential part of a hotel, motel, school or detention centre.

The We Live Here movement has reacted furiously to the government’s decision, accusing it of “wimping out” and turning residential homes into hotels.

Spokesperson Marshall Delves points out the impracticality of the proposed solution and said it was now “open slather” for the short-term accommodation industry in Victoria.

“Victoria let a golden opportunity slip to set an example to the rest of Australia and take a strong stance on short-term lets and Air BnBs that ruin the liveability and amenity of high-rise buildings,” Mr Delves said.

“It will be a matter of ‘catch me if you can’ as the proposed legislation only empowers OCs to bring proceedings in VCAT for penalties - and only after the parties have occurred.”

The State Government points out that the Victorian short-stay industry is now worth $792 million and pays $160 million in wages to 64,000 employees – an argument seized on by the Victorian Accommodation Industry Association (VicAIA).

VicAIA praised the government for “leading Australia in understanding the value of the sharing economy”.

Its president, Paul Salter, who operates Docklands Executive Apartments, has welcomed Minister Garrett’s amendments.

“The new legislation is a common sense approach and an important step towards regulatory management to ensure the responsible use of property by owners and investors in Victoria,” Mr Salter said.

“We will continue to work with the government and councils to ensure the new legislation is adhered to by our members and we will actively deal with the isolated incidents of unwelcomed party pads, rogue operators and unruly behaviour.”

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