Short-stay operator joins building appeal

Another Docklands serviced apartment operator has appealed the City of Melbourne’s attempt to use building regulation to stop the use of residential buildings for short-stay accommodation.

On May 4 a directions hearing for Yezz Pty Ltd’s appeal against building orders relating to the use of residential apartments in the Watergate building was heard in the Building Appeals Board.

The Loh family operates Yezz as Grand Harbour Accommodation and has appealed council-issued notices on behalf of 22 apartment owners.

It is the second such appeal to come before the appeals board, with operators Paul Salter and Belinda Balcombe’s case coming before the board on March 22.

Board chairman Leslie Schwarz issued almost identical orders in the Yezz case – determining that all matters would be heard concurrently later in the year.

Watergate Owners Corporation (OC) was legally represented at the hearing, foreshadowing that it will attempt to join the action on the side of the City of Melbourne.

Mr Schwarz extended the time set aside for the hearing in October from four half-days to six half-days in anticipation of the likelihood that the Watergate OC would be part of the case and would need time to present expert witnesses.

Tom Bacon, representing the OC, outlined the four reasons that Watergate owners wanted to be part of the proceedings.

He said the OC had concerns about:

The potential for the use of short-stay accommodation to invalidate its liability insurance policies;

The implications that the case may have on fire safety and monitoring and the potential need for a costly upgrade to the building;

Legal implications if a serviced operator employee was injured in one of the building’s common areas; and

Exposure to prosecution under noise and disturbance regulations resulting from the actions of transient visitors.

Mr Schwarz said that only the fire safety issues and matters relating to the actual use of the building would be relevant to the current proceedings.

“The owners corporation can take action in other places on the other matters,” Mr Schwarz said.

As a test case, the City of Melbourne is using the Building Code of Australia (BCA) in an attempt to wipe out the practice of serviced apartments in residential buildings, which is widespread in Docklands and in the rest of Australia.

The council is using a building code definition to claim that such use is illegal.  It is alleging that owners need to have “Class 3” permission (usually reserved for hotels and rooming houses) to operate serviced apartments – an issue which the apartment operators contest.  

It is widely accepted that if owners were forced to comply with Class 3 requirements, the use of serviced apartments in residential buildings would become commercially unviable.

The appeals board heard that the council last year issued notices to 27 Watergate owners. Yezz lawyer Toby Cogley told Mr Schwarz that there were 340 apartments in the twin-towered Watergate complex.