Victorian Strata Rule Banning Short Term Letting is No Good
Owners Corporation PS501391P v Balcombe [2015] VCAT 956
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2016 Victorian Supreme Court decision is about a rule made in Docklands strata title building that prohibited short term letting of apartments. It follows unsuccessful planning actions taken by City of Melbourne to stop the short term letting activities. The primary issue was whether the Rule made by the strata building prohibiting using strata lots for short term [less than 1 month] letting of apartments. After reviewing the history of Victorian strata laws and comparing them to other states, the Victorian Supreme Court decided that as kinds of secondary [subordinate] laws, strata rules were limited to things within the proper purposes of strata buildings or that are otherwise specifically allowed under the Owners Corporation Act 2006. In this case, the rule was not as it was about the use of lots where that was not something the strata building could control and the use was not prohibited under other laws. The decision sets out the limits on Victorian strata building rules, especially in relation to short term letting, but also for other prohibitions on lot usage. It’s also a useful history lesson about Victorian strata laws dating back to the 1960s.
Implications
The key implications of this strata case are as follows.
Victorian strata rule making power is limited, and more limited than in NSW.
Victorian strata rules must 2 be for a something covered in Schedule 1 of the Act and for control, management, administration, use or enjoyment of common property or lots.
A connection to just one strata purpose isn’t enough, rules must always be within the overall strata purposes Parliament intended under 3 tests.
A rule that is inconsistent with strata and other laws is ineffective under s 140.
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