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August 09 Edition Cover

Council goes for broke on serviced apartments

02 Aug 2011

By Shane Scanlan

In a move which will likely change the face of Docklands, the City of Melbourne wants to change the Building Code of Australia (BCA) so it can wipe out the practice of using resident apartments as serviced apartments.

The council’s Future Melbourne committee on August 2 unanimously supported a bid from its building department to request changes to definitions within the building code to make policing the practice more certain.

In his report to the committee, council building officer Warren Knight said serviced apartments in residential buildings caused numerous problems including fire safety, health, service levels, amenity and financial burden on other owners.

He said the use of apartment buildings for short-stay commercial accommodation was not specifically addressed in either the BCA or the planning scheme.

“As a result many apartment buildings are being built as traditional owner/occupier accommodation and then later being used partly or wholly as pseudo hotels,” he said.

Mr Knight told the committee his position was supported by the fire brigade, the building surveying profession and building owner’s corporations.

But Docklands serviced apartment operators warn that hospitality businesses in NewQuay will collapse without the financial support that visitors using short-term rentals bring.

Despite the uncertainly surrounding the definitions, the council recently tackled 30 owners at the Watergate tower in Batman’s Hill demanding that they apply for “hotel” permits if they wanted to avoid legal action.

It is yet to turn its attention to NewQuay where an estimated 300 apartments (or one third of the total) are being used as serviced apartments, with the largest operator being MAB Corporation’s Grand Mercure Docklands Apartments.

Six of the 30 Watergate owners have agreed to return to long-term rentals, with the majority opting to contest the matter using expert building surveyor consultants.

By requesting changes from the Australian Building Codes Board, the council is showing its clear intention of wiping out short-term rentals in residential apartments.

But it is also signalling that it is unsure of its legal position under the current regulations.  

Mr Knight told the committee that prosecutions were currently uncertain.

And in a recent letter to a Watergate owner, the council deferred to the Collins English Dictionary to define “dwelling”.

“In looking at what is defined as residence it means where a person resides, abode or home. The definition of reside is to live permanently,” the council wrote.

The council also wants an amendment to the 2009 Public Health and Wellbeing Regulations to require short-term rental owners to register their apartment.

Serviced apartment operators met in Docklands last month in response to the council’s demands of the Watergate owners to potentially form an association which could mount a co-ordinated and centralised response to threat to their businesses.

But it was assumed that the threat was confined to Watergate and no association was formed.  At the same time, Docklands News, was contacted by a CBD owner’s corporation seeking contact details of Docklands OCs with a view to forming alliances against serviced apartments.

The council has granted a time extension to Watergate serviced apartment owners until August 22 but says it intends to prosecute them if they don’t apply for a hotel permit.

“If the building order is not complied with legal action may be taken if the apartment still has not changed to long-term use or if a permit for the change of use to a hotel has not been issued,” a spokesperson said.

The committee’s recommendation needs to be endorsed at the next council meeting on August 30.

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  • William Ellis at 4:55pm on 03/08/11

    Typical councils..Going off half "cocked" with distorted facts and figures. Bureaucratic reactions to a minority of Owner/Occupiers hell bent on destroying a major tourism infrastructure.
    We can all work together ,occupiers and investors alike to enhance the
    Docklands future.
    Common sense so we all live in peace is the answer.
    Anything less will set the Docklands back 25 years.
  • Billie at 5:54pm on 04/08/11

    Impossible when its one sided.Those benifiting are operators and some owners.Wake up the fact that other major cities have changed the laws having realized long term tenants hate cleaning trolleys in their face every day , pay the bill for extra maintenace and security..running a business from a residential building they should also pay commercial rates!
  • Guillaume at 11:03am on 11/08/11

    Residents in these apartment blocks have a right to be concerned. We also should not overlook the fact that there is a strong demand for this style of accommodation. Visitors to Docklands and Melbourne want accommodation options - so why not? To be continued....
  • Guillaume at 11:03am on 11/08/11

    What is needed is that Owners Corporations use their powers and take more responsibility for managing this. The practice should not be be prohibited, but better management is called for. Government should require Owners and Operators of short term accommodation to be licensed and abide by a code of practice, as with the Residential Tenancies Act. A heavy handed approach is not the answer.
  • Phil at 4:33pm on 25/08/11

    I know from a few ‘lift discussions’ that the proposal is highly supported by the majority of those of us who l have to live with these transient neighbours. Yes the owners corporations should do more but lets be honest how much can they do under these circumstances. I don’t say this often but – good on the council!

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