Short-stay operators targeted

At least four owners' corporations across Australia are taking action against short-stay operators in the wake of a landmark ruling against short-term tenants in residential buildings.

Paul Salter, owner of Docklands Executive Apartments, was banned from running his short-stay business in a Melbourne apartment after the Building Approval Board found he was in breach of the Building Code of Australia (BCA).

Mr Salter was leasing out a unit in the 350-apartment Watergate building in the Docklands to short-term occupants, typically staying four days or less.

The board ruled short-term leasing was not allowed in residential buildings described as class two in the BCA. It said short-stay apartments fell within the class-three building classification, usually reserved for hotels and rooming houses.

Mr Salter this month appealed the ruling in the Supreme Court with the help of the Victorian Holiday and Short Stay Industry Group.

But lawyer Michael Teys, whose firm Teys Lawyers represented the Watergate owners' corporation at the board hearing, said he has taken on other building cases in Canberra, Melbourne, Sydney and the Gold Coast "that have this problem".

"They instructed me to shut down the unlawful serviced apartment operations in those buildings."

One owners' corporation was also looking to the Supreme Court for a declaration, Mr Teys said.

In March the board upheld the City of Melbourne's 2011 action against Mr Salter and two other owners of short-term apartments in Watergate. The BCA is a national code so the decision may set a national precedent. But Mr Salter said he was confident of winning the appeal as the board "wrongly focused on the commerciality of the transaction which is no different to a long-stay rental".

Short-stays are an ongoing point of conflict between dwelling owners and nearby residents.

In Watergate's case, the owners' corporation complained short-stay tenants caused damage to property, were noisy, fought, smoked and tampered with fire exits. But property investors and short-stay operators argue they are entitled to get a return on their dwelling.sjohanson@fairfaxmedia.com.au