Tower seeks to ban short-stay tenants
Owners corporations in apartment buildings across Australia are grappling with the difficulty of banning short-stay tenants whom residents commonly blame for disruptive behaviour. Owners in the Royal Domain Tower, across the road from the Shrine of Remembrance, voted overwhelmingly for corporation rule changes that forbid them to "lease, sublease or license a lot on a commercial basis for short-term periods of less than 30 calendar days".
Earlier this year, short-stay business operator Paul Salter overturned a Melbourne City Council decision to forbid his Docklands Executive Apartments from leasing apartments in the Watergate building on a short-term basis. The council has lodged an appeal against the Supreme Court's decision.
Any ruling will have national significance as the building code used to ban short stays is an Australia-wide regulation.
Changing a building's owners corporation rules was unlikely to stop short-stay use, said property lawyer Michael Teys.
Mr Teys, who represented the owners corporation in the Watergate case, said similar changes to owners corporation rules were tried in Queensland and NSW without success. "We're now seeing it emerge in Victoria. It's a good attempt at a difficult problem but it's not going to get them there."
Mr Stamoulis has listed the 36th-floor penthouse in the building for sale as construction nears completion on his $54 million Toorak mansion.
Frequently Asked Questions about this Article…
Owners in the Royal Domain Tower on St Kilda Road voted overwhelmingly to change owners corporation rules to forbid leasing, subleasing or licensing a lot on a commercial basis for short-term periods of less than 30 calendar days.
Owners corporations are trying to ban short-term rentals because residents commonly blame short-stay tenants for disruptive behaviour, and some buildings are changing rules to try to prevent commercial short-stay use that lasts under 30 days.
Yes. A recent Supreme Court ruling involving Paul Salter’s Docklands Executive Apartments overturned a Melbourne City Council decision to forbid short-term leasing in the Watergate building, and because the building code used to try to ban short stays is an Australia‑wide regulation, any ruling will have national significance. The council has lodged an appeal.
According to property lawyer Michael Teys, changing owners corporation rules is unlikely to fully stop short-stay use. He notes similar rule changes in Queensland and NSW were tried without success and that the issue remains difficult to resolve.
Investors should do due diligence: a building-level ban may reduce ability to earn short-term rental income, but enforcement can be difficult and legal challenges can overturn local bans. Be aware of owners corporation rules and ongoing legal or council actions that could affect rental options.
Potentially. If a building enforces a ban on commercial short-term rentals (under 30 days), owners who rely on that income stream could see reduced options. However, the article notes enforcement and legal outcomes are uncertain, so impacts may vary by building and by court decisions.
The article mentions developer Harry Stamoulis, who is selling a $15 million penthouse on the 36th floor of the St Kilda Road (Royal Domain) tower, short-stay operator Paul Salter (involved in the Watergate/Docklands case), and property lawyer Michael Teys, who represented an owners corporation in the Watergate case. It also references the Melbourne City Council and the Watergate building legal dispute.
Investors should watch the outcome of the Melbourne City Council's appeal in the Watergate case, any further court rulings that interpret the Australia‑wide building code, and local owners corporation rule changes—because these legal developments will influence whether building-level bans on short stays are enforceable and how they affect the short-term rental market.
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