Airbnb Laws – How Do They Work For Your Melbourne Owners Corporation?

This is an article repost. Originally posted in our old website on 2018-10-29


New Airbnb laws are now in force in Victoria and wherever you stand on the debate, it is important to know how these laws affect you and your Owners Corporation and how they can be enforced in practice.


Strata Plan sat down with Elizabeth Chase from the Madison Marcus law firm to find out more.


Airbnb and Melbourne Owners Corporations – New Laws Pass


The Owners Corporation Amendment (Short-stay Accommodation) Act 2018 passed parliament in August to mixed reviews.


In effect, the laws grant new powers to VCAT, which will now be able to issue fines to guests of up to $1,100 for making unreasonable noise, causing a health or security hazard, damaging common property or obstructing a resident from using their property.


Hosts could also be forced to pay their neighbours or Owners Corporations up to $2,000 in compensation.


The new laws stop well short of giving Owners Corporations the power to regulate whether or not short-term leases, such as those organised through platforms like Airbnb or Stayz, are permissible in their buildings.


Whether you believe the laws go far enough or not, it’s important to understand how these new laws can be applied within your Owners Corporation, so Strata Plan sat down with Elizabeth Chase of the Madison Marcus law firm to get a better understanding of how these laws work from a practical point of view.


She said that it remains to be seen how much of an impact these new laws will have.


“Whether these amendments are likely to create any lasting change in this arena is yet to be determined,” Ms Chase said.


“It is noted that there is now another area of responsibility for already overwhelmed committees to contend with and we can only hope it is worth the trouble.


“The fact that owners who are the subject of 3 or more separate complaints may be prohibited from renting out their property as short stay accommodation or may be subject to a compensation order of up to $2,000 will hopefully act as a sufficient deterrent against failing to properly manage short-stay tenants.”


How Will The New Short Stay Laws Work In Victoria?

“The Owners Corporations Amendment (Short-stay Accommodation) Act 2018 was introduced in attempt to regulate the provision of short-stay accommodation arrangements in lots or parts of lots affected by an owners corporation by providing avenues for owners within an owners corporation to make a complaint about short-term letting guests staying in another lot,” Ms Chase told Strata Plan.


The new laws work in a similar vein to existing processes in place to help mediate and resolve disputes within Owners Corporations.


That is, they require a complainant to lodge a complaint about an alleged breach under the Act about a short-term letting guest or the lot owner.


As the new laws are incorporated under the Owners Corporation Act (Vic) 2006, there is no need for your Owners Corporation to draft and pass new by-laws or rules to enforce the new laws.


Once a complaint is made in writing, your Owners Corporation will then need to decide whether or not it will take action with respect to the breach.


What Do The New Victorian Short Stay Laws Define As A Breach?

According to the Act, a short-stay occupant is in breach by engaging in a range of conduct.


Complaints can be made to the Owners Corporation if guests are:

  • Making excessive amounts of noise;
  • Interfering with owners or guests of other lots;
  • Creating hazards to health and safety in common areas;
  • Preventing owners or other guests of owners access to common areas; and
  • Damaging any aspect of the apartment complex


“Complaints need to be initially raised in writing to the Owners Corporation,” Ms Chase said.


“Then the Owners Corporation need to decide whether or not they are going to take action in respect of the alleged breach.”


The Act does state that complaints need to be made via the “approved form”, but does not specify what that form is other than it has to be in writing.


Anyone making a complaint should provide as much evidence as possible to support their claim to help the Owners Corporation decide whether or not they should take action with respect to the alleged breach.


The decision on whether or not to act on the alleged breach will typically lie with the elected Owners Corporation committee unless a secondary grievance committee has been elected at the previous General Meeting.


What Happens If A Complaint Is Made Against An Airbnb Or Other Short Stay Guest?

If a complaint is made, it will more often than not be made to the Owners Corporation manager.


If Strata Plan is your Owners Corporation manager, we will bring the complaint to the committee’s attention and seek instructions on how to proceed.


What should you do if you, acting on behalf of the Owners Corporation, receive such a complaint?


“If your Owners Corporation receives such a complaint there are a number of things you should consider before you decide what to do next,” Ms Chase said.


“First, ensure the complaint is on an approved form, second make a copy if requested and third, evaluate whether or not to take action.


“Keep in mind, the Owners Corporation must not take action under this Part in respect of an alleged breach by a short-stay occupant unless it believes on reasonable grounds that the short-stay occupant has committed the alleged breach.”


Once the Owners Corporation has made a decision on whether or not it will take action with respect to an alleged breach, it should take the following steps.


“If the Owners Corporation decides not to take action it must give a notice to anyone who made the complaint setting out the reasons for the decision,” she said.


“If the Owners Corporation decides to take action it must, firstly, give notice of the allegation to the lot owner and the short-stay provider (if the short-stay provider is not the lot owner); and they may give notice of the allegation to the short-stay occupant.


“The notice must specify the alleged breach and state that the person to whom the notice is given is required to rectify the breach if this has not been done so already. Regardless the Owners Corporation may decide to apply to VCAT to seek one or more of the following orders:

  1. a) A prohibition order
  2. b) An order for a civil penalty
  3. c) Any such order that VCAT sees fit.”


The orders VCAT can now impose include fining guests up to $1,100 for making unreasonable noise, causing health or security hazards, damaging common property or obstructing a resident from using their property, as well as forcing hosts to pay neighbours up to $2,000 in compensation.


If a host’s property has been hit with three complaints, they could be banned from running a short-stay lease at all, however, it is unclear if the three complaints have to be about three separate incidents, three separate breaches, or three separate complaints about the one incident.


If you are concerned about the operation of short-stay apartment leases in your Owners Corporation, get in touch with Strata Plan to discuss your options, or fill out a Complaints Form and ensure you include as much evidence as possible of any alleged breaches.


Please note: the discussion in this article is general in nature.


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