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Short-stays in the aftermath of COVID-19

August 09 Edition Cover

OC to appeal short-stay decision

30 Sep 2015

OC to appeal short-stay decision Image

The Watergate Owners’ Corporation (OC) will appeal the Victorian Civil and Administrative Tribunal (VCAT) short-stay decision after achieving an interim special resolution last month.

The interim resolution was passed at a general meeting on September 14, attended by around 100 people.

Achieving a special resolution is commonly considered to be a difficult task for OCs, however Watergate managed to collect enough proxy votes in support of the resolution before the meeting started.

According to Watergate OC president Barbara Francis, 374 of the building's 665 lots voted via proxy or at the meeting.

She said of those that voted, 95.5 per cent were in favour of the resolution while 4.5 per cent were opposed.

Ms Francis said this equated to 53 per cent of the total lot entitlement in favour of appealing the VCAT decision.

As long as less than 25 per cent of owners oppose the resolution in the following 29 days it will be passed as a special resolution and the OC will be able to proceed with the Supreme Court appeal.

The appeal relates to a VCAT decision, which found the OC did not have the power to make a rule prohibiting stays of less than 30 days.

Speaking at the general meeting, Ms Francis said: “We live in a lovely residential building that’s classified as such and I don’t want to see it turned into a hotel.”

There are currently 13 short-stay apartments in the building and the OC is appealing the VCAT decision because of concerns that the current operators could expand and new operators could establish themselves in the building.  

The OC’s lawyer Tom Bacon told the meeting that the specialist panel convened to advise the Planning Minister Richard Wynne and Consumer Affairs Minister Jane Garrett had resulted in an impasse and the government was consulting more widely.

A Consumer Affairs spokesperson confirmed the Government was currently consulting with the bodies represented on the panel before finalising its position.

“The Victorian Government is committed to improving the regulation of apartment buildings so that property is protected from unruly short-stay parties.”

“It is aiming to make any necessary changes to the Owners Corporations Act 2006 by early next year,” the spokesperson said.

Addressing the general meeting, Mr Bacon encouraged owners to take the fight to the Supreme Court because the Government was “watching”.

“Consumer Affairs representatives are watching to see what Watergate does,” Mr Bacon said.

Although the resolution was passed, the OC was also faced with questions from owners at the meeting about why Watergate owners should fund further legal action when other buildings affected by short-stays stood to benefit.

Ms Francis said she agreed Watergate shouldn’t be funding the legal action on its own and said the OC was currently investigating avenues for financial support from other parties.

Ms Francis confirmed the OC had spent $150,000 at the Building Appeals Board (BAB), when it was adjoined with the City of Melbourne in a case between the council and short-stay operator Paul Salter in 2012.

She said the cost of pursuing legal action against short-stays in the building had been around $180 per apartment per year, since 2012.

“We’ve made extraordinary progress so far,” Ms Francis said.

While the OC was successful in passing the resolution, one Watergate committee member raised concerns about the appeal, in a media release created by a group of residents calling themselves "Executive Committee of Concerned Owners".

“Changes in the short-term accommodation industry cannot happen without legislative change or cooperation and collaboration from the industry bodies,” committee member Jamal Hakim said.

“This is not a Watergate specific issue and I am strongly against Watergate owners bearing the cost of this proposed action in the Supreme Court, which will negatively impact apartment prices and unlikely result in any change.”

Addressing the meeting after the vote, Mr Salter, who is also a resident of the building, called for an end to legal spending.

He has also posted all owners a letter and proxy form, urging them to change their votes.

“As an owner, I feel that giving this committee authority to have an open cheque book to launch a Supreme Court action because of a fear that a rogue operator may enter the building is negligent,” Mr Salter said.

Since the initial BAB case, the OC has not formally been adjoined to the ongoing legal battle between council and Mr Salter, which ended in a settlement at the BAB in 2014, without curbing short-stays in the building.

However, last year the OC decided to take nine owners of short-stays apartments in the building managed by Mr Salter’s Docklands Executive Apartment business to VCAT over alleged breaches of OC rules.

This case resulted in a VCAT decision, which found the OC did not have the power to make rules restricting length of stay and which the OC now plans to appeal at the Supreme Court.

On September 15 the Watergate OC and Mr Salter returned to VCAT for a final orders and costs hearing.

However, given the OC’s plan to appeal the decision, Member Rowlands agreed to make orders in two of the nine matters, which would then be appealed at the Supreme Court.

The matters pertaining to the seven remaining short-stay owners would be struck-out with right of reinstatement if the appeal was successful.

Member Rowlands indicated at the September 15 hearing that her preliminary view was that the OC should bear the cost of the VCAT case, however was yet to make a final decision.

Mr Salter’s lawyer David Fairweather had earlier submitted that either the OC or its representatives, Strata Title Lawyers, should bear the costs of the case.

However, VCAT member Linda Rowland said an application for the lawyers to pay the costs was “far-fetched”.

“I don’t think there is any justification here for making Strata Title Lawyers personally liable for costs,” Member Rowland said.

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