News & Insights

The Owners Corporation Amendment (Short-Stay Accommodation) Act (“the Act“) is set to come into force on 1 February 2019, leaving Victorian apartment owners potentially liable for any damage, noise or loss of amenity caused by their guests.

The purpose of the Act is to amend the Owners Corporation Act 2006 to regulate the provision of short-stay accommodation arrangements (defined as accommodation provided for a maximum of seven days and six nights) in prescribed residential apartment buildings affected by an Owners Corporation. In particular, the Act is aimed at short-term leases organised through platforms such as Airbnb and Stayz.

The incoming changes

Under the Act, owners, tenants and managers will be able to complain to the Owners Corporation for a range of conduct breaches engaged in by short-stay occupants. These breaches include:

• making unreasonable and excessive amounts of noise;
• interfering with the use and enjoyment of owners or guests of other apartments;
• creating hazards to health, safety and security in common areas;
• preventing owners or other guests of owners from accessing common areas; and
• substantially damaging or altering common property.

The new laws operate in a similar vein to existing processes in place to mediate and resolve disputes within Owners Corporations. However, under the Act, an Owners Corporation is only required to serve a Notice to Rectify Breach on an owner and on the short-stay provider (if they are not the owner). If the breach is not remedied, the Owners Corporation can apply to VCAT without serving a Final Notice to Rectify Breach. Notably, the Act provides no timeframe for an offending party to rectify the breach.

VCAT will have the power to make any order it considers fair. This may include:

• a fine of up to $1,100;
• loss of amenity compensation of up to $2,000 payable to the Owners Corporation or another occupier; and/or
• a prohibition order (for example, owners who are subject to three or more separate complaints made to the Owners Corporation may be prohibited from renting their property out as short-stay accommodation).

The Act also provides for joint and several liability of both owners and occupiers, depending on the circumstances.

While the Act stops short of giving an Owners Corporation the power to regulate whether or not short-term leases are permissible in their building, Marlene Kairouz, the Minister for Consumer Affairs, Gaming and Liquor Regulation, believes that the laws are a step in the right direction in reducing the number of incidents of dangerous and “unruly behaviour” in short-stay accommodation.

The NSW Government has also moved to act on issues around short stay holiday rentals, announcing a new regulatory framework.

For more information on the new short-stay laws, or if you need any advice regarding the changes, please do not hesitate to contact our property law team.

This article was written by Serpil Bilgic, Law Graduate.