Short-stay operators targeted
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
Frequently Asked Questions about this Article…
The Building Approval Board found that short-term leasing in the Watergate residential building breached the Building Code of Australia (BCA) and banned owner Paul Salter from running his short-stay business, ruling that short-stay apartments in class two residential buildings fall within a class-three (hotel/rooming house) classification.
Yes. The BCA is a national code, and the board noted its March decision upheld the City of Melbourne's 2011 action. Because the BCA applies nationally, the ruling could set a precedent for how short-stay renting is treated across Australia.
The article reports at least four owners' corporations across Australia are taking action against short-stay operators, and at least one owners' corporation is seeking a declaration in the Supreme Court.
Owners' corporation complaints in the Watergate case included property damage, excessive noise, fighting, smoking, and tampering with fire exits — issues that prompted the legal action.
Paul Salter appealed the Building Approval Board's decision to the Supreme Court with assistance from the Victorian Holiday and Short Stay Industry Group. The article also notes lawyers representing owners' corporations have taken on similar cases in other jurisdictions.
According to the board's finding, class-two buildings are residential and do not permit short-term leasing, while short-stay apartments were judged to fall under class three (typically hotels and rooming houses). That classification difference is central to whether short-stay operations are allowed in a given building.
The article notes property investors and short-stay operators argue they are entitled to a return on their dwellings. If short-stay operations are restricted in class-two buildings under the BCA ruling, it could limit the ability to operate short-stay businesses in those buildings and therefore affect potential returns.
Yes. Michael Teys, the lawyer who represented the Watergate owners' corporation, said he has taken on similar building cases in Canberra, Melbourne, Sydney and the Gold Coast, indicating comparable disputes are occurring in multiple cities.
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