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Short-stays: A race to the bottom?

28 Feb 2018

Short-stays: A race to the bottom? Image

By Shane Scanlan

Veteran Docklands short-stay apartment operators are aghast about recent activities by “fly-by-night” operators who they say are tarnishing their industry.

Docklands Executive Apartments operator Paul Salter says the newcomers seem determined to win a “race to the bottom” in terms of price, quality and service.

Mr Salter says short-stay operators should be licensed if consumers are to be protected from shoddy and unscrupulous practices.

He points to the explosion of key safes in public areas around the new 888, 889 and 883 Collins St apartment towers as evidence of the problem.

Docklands News understands that about 20 per cent of apartments in 889 and 883 Collins are being rented as short stays and that the vast majority of these are Airbnb-style sole apartment operators. At the more established 888 Collins St it is 7 per cent.

The City of Melbourne says it has removed more than 200 box-key combination locks from public infrastructure in recent times.

A council spokesperson said: “As many buildings cannot be accessed without a key, in recent months there have been large numbers of these locks being placed on council and public facilities such as bike racks, street furniture and tree surrounds.”

“In response to complaints, the City of Melbourne has directed its contractors to remove any locks illegally attached to public infrastructure.”

Docklands Private Collection of Apartments operator Lyn Kelly is also concerned about the damage being done to the reputation of the industry and to Docklands.

“We have been in business for over 10 years, and it is disappointing to see that these rogue operators tarnish the good reputation of this young industry,” Ms Kelly said. “I am confident that the public will very quickly develop the skills to make better choices by doing a few simple checks.”

And it’s not just the key-safe-equipped absentee landlords who were lowering the tone.

A new shop-front entrant to the market has attracted national attention for alleged scamming of guests.

Zenith Services Apartments in Merchant St was the subject of an “exposé” by current affairs program Today Tonight early in February (https://www.facebook.com/ttadelaide/videos/1713985421956400/). The program interviewed a number of guests who alleged their security bonds were withheld.

Accountant Jarrod Rogers goes further in an online blog investigating related operations of business owner Shivesh Kuksal (http://www.beyondaccountancy.com.au/zenith/).

Mr Rogers further alleges that Consumer Affairs Victoria is not interested in helping people recover their deposits.

In a statement to Docklands News via Royce Communications, Mr Kuksal said he was suing Channel 7 for defamation.

He said Zenith had always intended to return security deposits to guests, but had suffered “administrative difficulties”.

“Zenith suffered administrative difficulties resulting in delays of refunds for which we apologise and continue to correct,” Mr Kuksal said. “We aim to deliver the refund within two weeks, however in some instances there were delays for which we apologise.”

“From 2 February 2018, Zenith replaced the former deposit system with a more efficient credit or debit card pre-authorisation system to ensure guests receive timely deposit releases.”

Lyn and Peter Kelly pioneered the industry in Docklands and were shortly followed by Paul Salter and his partner Belinda Balcombe. It was Mr Salter and Ms Balcombe who won VCAT and Supreme Court test cases which have prevented owners’ corporations from banning short-stay apartments in residential buildings.

Mr Salter says a simple registration process controlled by the Business Licensing Authority could solve the problem.

“Any person wanting to provide any service to the community should be required by law to provide their full name, address, phone number, ABN number, proof of public liability insurance, any proposed trading names and then they are issued with a BLA number,” Mr Salter said.

“If you are caught trading or providing any service to the public without that number, then first fine $10,000, second fine, $25,000 and third fine $100,000. Then you would get rid of the rogues that try and pop up under another name.”

Ms Kelly said five simple checks would protect consumers from “cowboy” operators:

Do they have a website?

Are they a member of the Victorian Accommodation Industry Association (VicAIA)?

Read the online reviews;

Are they listed on TripAdvisor? and

Always call the operator directly and ask a few simple questions to establish if they are real, can speak English and have any customers service skills. 

“You know you are in trouble if you have to look for a key safe hanging off a rusty bike, public railing or seat,” she said. “It will be even harder because you will probably have 10 or 20 key safe to choose from.”

Mr Salter said: “If an operator is not a member of VicAIA, be very wary. They are not accountable. Do not use them.”

“If you make a apartment booking and then you are told to pick up the keys from a key safe on a rusty bike, cancel the booking and get your money back. Do not use them.”

Ms Kelly said: “A professional apartment operator will make a ‘pre-authorisation’ to establish a security deposit. A direct purchase would only be taken on the rare occasion where the operator was worried about a guest.”

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