Short-stay rentals through platforms like Airbnb and Stayz have transformed how many apartment owners use their properties. While some see it as valuable income, others worry about noise, security, and wear on common property.
This guide helps Victorian owners corporations navigate the complex world of short-stay rentals, understand evolving regulations, and develop fair policies that work for your building.
What's Covered
Understanding Short-Stay Rentals in Strata
Short-stay rentals typically involve renting an apartment for less than 28 consecutive days. In strata buildings, this creates unique challenges as temporary occupants use shared facilities without the same investment in community harmony as permanent residents.
The Growing Trend
Victorian strata buildings increasingly deal with short-stay rentals as owners seek additional income. This trend affects buildings differently based on location, size, and resident demographics. Tourist areas and inner-city locations see higher concentrations, while suburban family-oriented buildings may have minimal activity.
Types of Short-Stay Arrangements
Understanding different rental types helps develop appropriate policies:
- Entire apartment rentals: Owner vacates completely for guests
- Room rentals: Owner remains while renting spare rooms
- Occasional rentals: During owner holidays or work trips
- Commercial operations: Dedicated investment properties for short-stays
How Short-Stay Rentals Impact Your Building
Every building experiences different effects from short-stay rentals. Understanding these impacts helps committees make informed decisions about appropriate policies.
Common Concerns from Residents
Permanent residents often report specific issues that affect their quality of life. Noise complaints top the list, particularly from late-night arrivals and departures or holiday parties. Security concerns arise when unknown people regularly access the building, potentially compromising resident safety. Increased wear on common areas like lobbies, lifts, and pools can accelerate maintenance needs and costs.
The sense of community that makes apartment living attractive can erode when neighbors constantly change. Some residents feel their home has become a hotel, affecting their emotional investment in the building.
Potential Benefits
However, short-stay rentals aren't universally negative. They can provide essential income for owners facing financial hardship, helping them keep their homes. In buildings with commercial spaces, increased foot traffic may benefit ground-floor businesses. Some argue that responsible short-stay hosting brings vibrancy to otherwise quiet buildings.
Financial Implications
The financial impact on owners corporations varies significantly. Increased cleaning and maintenance costs often arise from higher usage of common areas. Security upgrades may become necessary to manage access for temporary occupants. Insurance premiums might increase if insurers view short-stay rentals as higher risk. However, some buildings successfully charge additional levies for short-stay apartments, offsetting these costs.
Legal Framework for Victorian Strata Buildings
Victorian law provides owners corporations with various tools to manage short-stay rentals. Understanding these options helps committees develop legally sound policies.
Owners Corporation Powers
Under the Owners Corporations Act 2006, your owners corporation has significant authority to create rules governing lot usage. These rules can restrict or regulate short-stay rentals, provided they follow proper procedures and don't unfairly discriminate against particular owners.
Recent legislative changes have strengthened owners corporations' abilities to manage short-stays. Courts increasingly support well-drafted rules that address genuine concerns about amenity and security. However, rules must be reasonable and proportionate to be enforceable.
Creating Enforceable Rules
Effective short-stay rules require careful drafting. Rather than blanket bans, consider provisions that address specific concerns while respecting owner rights. Rules might cover minimum stay periods, guest registration requirements, noise restrictions, or additional levy contributions.
The process for implementing rules depends on their scope. Minor regulations may need only ordinary resolutions, while significant restrictions typically require special resolutions with 75% support by lot entitlement.
Compliance and Enforcement
Even the best rules need effective enforcement. Establish clear procedures for reporting breaches and responding to complaints. Document all incidents thoroughly, as this evidence proves crucial if matters escalate to formal proceedings. Consider appointing a dedicated committee member to oversee short-stay compliance.
Developing Effective Building Policies
Creating short-stay policies that work requires balancing competing interests while focusing on practical outcomes. Small to medium buildings often find success through collaborative approaches that recognize everyone's concerns.
Starting the Conversation
Begin by understanding your building's current situation. Survey owners and residents about their experiences and views on short-stays. This information helps identify specific issues to address rather than implementing generic rules that may not fit your community.
Successful policy development involves all stakeholders from the start. Host informal discussions where owners can express concerns and suggestions. In smaller buildings, these face-to-face conversations often achieve better outcomes than formal meetings alone.
Policy Options to Consider
Different approaches suit different buildings. Registration systems require hosts to notify the owners corporation of all short-stay bookings, enabling better oversight. Minimum stay requirements (such as three or seven nights) can reduce turnover and associated disruptions. Guest limits prevent party situations while allowing legitimate rentals.
Financial measures might include additional levies for short-stay lots to offset increased costs or security deposits to cover potential damage. Some buildings require hosts to provide local contact details for immediate issue resolution.
Implementation Timeline
Rushing policy changes often creates conflict. Allow adequate time for consultation, drafting, and legal review. Typical timelines span three to six months from initial discussions to implemented rules. This measured approach helps achieve buy-in from affected owners and increases voluntary compliance.
Practical Management Strategies
Once policies exist, ongoing management determines their effectiveness. Successful buildings develop systems that minimize committee workload while maintaining standards.
Monitoring and Communication
Regular communication prevents small issues becoming major conflicts. Establish clear channels for residents to report concerns promptly. Monthly updates at committee meetings help track trends and identify emerging problems. Some buildings create dedicated email addresses for short-stay related matters, ensuring consistent handling.
Building positive relationships with responsible hosts often achieves better outcomes than heavy-handed enforcement. When hosts understand how their actions affect neighbors, many voluntarily improve their practices. Consider creating a host guide outlining building expectations and local amenities.
Dealing with Problem Properties
Despite best efforts, some properties may cause ongoing issues. Document all incidents meticulously, including dates, times, and impacts on residents. This evidence supports any formal action. Start with informal discussions, escalating to formal warnings only when necessary. Most situations resolve through communication, but persistent breaches may require legal action.
Working with Platforms
Major booking platforms increasingly cooperate with owners corporations to address problems. Establish contacts with platform representatives who can assist when issues arise. Some platforms offer neighborhood support lines for reporting party houses or other serious breaches. Understanding these resources helps committees respond effectively to incidents.
Frequently Asked Questions
Can our owners corporation completely ban short-stay rentals?
Victorian owners corporations have significant powers to regulate short-stays, including implementing substantial restrictions. However, any rules must be reasonable, proportionate, and properly implemented through appropriate resolutions. Recent legislative changes have strengthened these powers, but specific legal advice is recommended for your situation.
How do we handle owners who ignore our short-stay rules?
Start with informal communication to understand why rules are being breached. If this fails, issue formal breach notices as per your rules. Document all incidents thoroughly. Persistent breaches may warrant VCAT proceedings or other legal action. Having clear, enforceable rules from the start makes this process smoother.
What if short-stay guests damage common property?
The lot owner remains responsible for any damage caused by their guests. Your rules should clearly state this responsibility. Consider requiring short-stay operators to maintain adequate insurance and potentially lodge security deposits. Document all damage immediately and follow up with the owner promptly.
Should we charge extra levies for apartments used as short-stays?
Many buildings successfully implement additional levies for short-stay properties to offset increased wear and administrative costs. These must be reasonable and related to actual additional costs. Conduct a proper analysis of extra expenses before setting levy amounts, and ensure proper authorization through required resolutions.