Short-term letting of apartments – know your rights.

By Evelyn Marcou, Senior Associate, MST Lawyers

In July 2016, the Supreme Court of Victoria handed down an important decision in Owners Corporation PS 501391P v Balcombe [2016] VSC 384 regarding whether an Owners Corporation had the power to make a rule prohibiting short-term letting of apartments.

The Court held that the relevant legislation did not give the Owners Corporations power to make a rule that prohibited the use of residential lots for ‘any trade or business’ because:

• the principle role of an Owners Corporation was to manage and administer the common property of a strata division
• the legislation did not disclose any intention for Owners Corporations to have power to substantially interfere with a lot owner’s proprietary rights
• any parliamentary intention to provide Owners Corporations with powers that could substantially inhibit the conduct of lot owners on their own lot would need to be expressed in clear and unambiguous language.

It is likely that these decisions have opened the gate for short-term letting arrangements to become more common in apartment buildings. In this regard, as long as an apartment owner has obtained any required planning permission to use their apartment for short-term letting, they do not require the permission of the Owners Corporation to enter into such arrangements.

For further information, please contact our Property & Leasing team by email property@mst.com.au or by telephone Ph: +61 3 8540 0200.