The Independent Panel on short-stay accommodation’ has published its final report. The Panel made recommendations that:
- OCs be able to serve a ‘notice to rectify breach’ on the person offering the accommodation (whether the owner of the property, the lessee or agent) regarding breach of OC rules by short-stay occupants; and
- VCAT be able to make an order on the breach notice that the apartment is not allowed to be used for short-term stays for a period of time, or until it is sold.
It is said that this would empower OCs to deal with the problem using existing powers and procedures under the OC Act, and make the provider of the short-stay accommodation responsible for their occupants. In a practical sense, it may be difficult and costly for the OC to use the notice system.
The government is now consulting on the report.
In the meantime, the validity of a rule against short term stays in the current legislative scheme was examined by the Tribunal in Owners Corporation PS501391P v Balcombe  VCAT 956. The proceeding was concerned with short term letting of eleven apartments in the Watergate building at Docklands.
In earlier proceedings, Melbourne City Council had sought to argue before the Building Appeals Board, the Supreme Court and the Court of Appeal that use of the Watergate apartments was contrary to the Building Code of Australia classification approved in the occupancy permit. Council ultimately failed.
The Tribunal concluded that short term stays were not prohibited by the occupancy permit or the planning permit. It also held that the OCcould not make a rule to prohibit using the lot for short term stays.
An OC cannot prevent specific uses of a lot (for example, it cannot pass a rule prohibiting an owner using the lot for business purposes) but it can pass a rule that seeks to prevent hazard, nuisance or noise from a lot. To be valid, such a rule must focus on regulating the activities of lot users, not on regulating the use of the lot, or prohibiting certain types of use or occupation altogether.