Legal Insights

New laws for short-stay accommodation

By Nick Sparks

• 20 May 2019 • 3 min read
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We examine short-stay accommodation changes to the Owners Corporations Act 2006 (Vic).

The short-stay accommodation changes to the Owners Corporations Act 2006 (Vic) (the Act) are now in force as of 1 February 2019, with Victoria following New South Wales’ lead to attempt to regulate use of residential apartments for short-stay accommodation.

As outlined in our previous article, Managing The AirBnB Effect, short-stay accommodation is defined as stays under lease or licence that are for a maximum period of seven days and six nights.

Complaints and procedures

Making a complaint

An owner, occupier or a manager of a lot may make a written complaint to the owners corporation (OC) about an alleged breach in relation to any of the following conduct:

  1. unreasonably creating any noise or behaving in a manner that interferes with the peaceful enjoyment of another occupier or guest
  2. causing a substantial hazard to the health, safety and security of any person on a lot or common property
  3. substantially damaging or altering a lot or common property.

A complaint regarding personal injury cannot be made under this part of the Act.

Responsibility of the owners corporation

The OC must then decide:

  1. to take action if it believes on reasonable grounds the breach has been committed, or
  2. not to take action and give notice with reasons for the decision to any person who made a complaint.

If the OC decides to take action it must give written notice to the lot owner requiring the person to rectify the breach.

The requirements on OC managers may increase their workloads and therefore the fees charged to lot owners.

Victorian Civil and Administrative Tribunal (VCAT)

If an owner or occupier fails to rectify a breach specified in a breach notice of a lot, then the next step is for VCAT to hear disputes.

If a breach is not rectified, the OC, a lot owner, an agent or an occupier may apply to VCAT and after VCAT considers some key issues, VCAT may hand down:

  1. a civil penalty order not exceeding $1,100
  2. a compensation order not exceeding $2,000, or
  3. any other order VCAT may make.

In addition, if an owner or occupier has been issued three or more breach notices, then VCAT may also make an order prohibiting the use of a lot for short-stay accommodation.

Obviously a prohibition is the biggest stick in the Act to bring rogue short-stay operators into line. However, it is yet to be seen whether OC’s and their managers will have the appetite for the cost and administrative burden to enforce the new Act.

Need advice on these changes?

Contact the Property & Development team.

By Nick Sparks

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