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Collision course on serviced apartments

31 May 2011

The City of Melbourne is on a collision course with owners of serviced apartments at Watergate.

The council will demand they either comply with building regulations governing hotels or stop short-term renting.

In April the council’s building department wrote to owners and gave them 30 days to “show cause” why they should not be forced to comply with building regulations covering hotel accommodation (class 3).

The owners say renting as serviced apartments is a residential activity and they should not have to “show cause”.

But the council has met the owners and agents and is unimpressed with their claim that serviced apartment use fits within the building classification of a residential apartment, as defined by the Building Code of Australia.

A spokesperson said the council had granted an extension of time for additional information to be provided to demonstrate that the apartments “either comply or to otherwise justify why the apartments should not either be converted back to typical apartment use or a building permit (be) obtained to convert the apartments to short-term hotel-style accommodation.”

The council spokesperson said: “If the owners cannot prove that their apartments comply with the regulations, the City of Melbourne will issue a building order requiring a building permit be obtained to convert them to class 3 or the use be reverted back to traditional long-term apartment use.”

Other serviced apartment operators and opponents of short-term accommodation will be watching this case with interest.

In NewQuay where about a quarter of all apartments are being rented on the short-term market, operators are under attack from the owners corporations of the Nolan and Conder buildings.

The owners corporations are conducting ballots on a proposed rule change to ban the practice.  The Nolan ballot closes on June 12 while the Conder ballot closes on June 17.

If the Watergate owners comply with the class 3 regulations, this could be seen as an admission that they have changed the use of their apartment from residential.  Under owners corporation rules, any change of use requires the permission of the owners corporation.

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