This article discusses the implications of short term rental insurance cover when apartments are let using sites like Airbnb.
Table of Contents:
- QUESTION: I manage a short-term accommodation rental in our building. Recently, my disruptive guests caused havoc. The owners corporation has issued me a breach notice, threats and bullying behaviour but refuses to assist me in managing the problem.
- QUESTION: A lot owner in our small scheme short term lets. Their renters are encouraged to bring pets. This has created mess around the exterior of the building. How do we stop this?
Question: I manage a short-term accommodation rental in our building. Recently, my disruptive guests caused havoc. The owners corporation has issued me a breach notice, threats and bullying behaviour but refuses to assist me in managing the problem.
A hotel manages the first few levels of the building. A few months ago, our building saw an increase in criminal activities. The committee increased security on the ground floor, where the hotel reception is located.
I manage a short-term accommodation rental in our building. A month ago, some people blacklisted by the hotel joined my guests in my lot, stole more than $1300 worth of belongings, and were very noisy. It was a nightmare! They returned, booking under a different name and misbehaved again three weeks later.
I’ve received threatening emails, a breach notice from our strata manager and a notice to comply from the council. I’ve asked the owners corporation and hotel to cooperate with me to solve the problem by notifying me if they identify the guests on CCTV or if I can install CCTV, but they refuse.
Can the owners corporation continue to threaten and bully me despite refusing to cooperate to solve this issue?
Answer: The onus is on lot owners to manage occupiers of their lot, not the owners corporation.
On 1 February 2019 the Owners Corporations Amendment (Short-stay Accommodation) Act 2018 (Vic) came into force, which aimed to regulate the increasing number of short-stay accommodation arrangements in residential apartment buildings in Victoria.
Under these rules, which are encapsulated in Division 1A, sections 159A – 159F of the Owners Corporations Act 2006 (Vic) (‘Act’), apartment owners are now liable for any damage, noise other disruption caused by their short-term guest, meaning a stay of 7 days or less. The rules allow other lot owners and occupiers to file complaints to their respective owners corporation about undesirable behaviour of short-stay occupants, including:
- Causing unreasonable noise or behaving badly.
- Creating a health, safety or security hazard.
- Obstructing the lawful use and enjoyment of the common property.
- Damaging either private or common property.
Once a complaint has been made, the owners corporation has the discretion to issue breach notices. If these notices are disregarded, the owners corporation may apply to VCAT to resolve the dispute.
VCAT, in turn, can:
- Ban the use of a lot for short-stay accommodation if a lot owner has received three notices from the owners corporation in the past two years.
- Fine guests up to $1,100 for disruptive behaviour.
- Award compensation of up to $2,000 to each affected neighbour.
The enforcement of breach notices and emails relating to short stay accommodation complaints may not constitute bullying. Rather, it is likely that VCAT would find this to be good building management by the committee and strata manager, particularly in circumstances where goods have been stolen and the council has issued a notice to comply with any local laws relating to short stay rental accommodation.
The onus is on lot owners to manage occupiers of their lot, not the owners corporation. In such circumstances, lot owners must be mindful of their potential liability under the Act to pay compensation or damages for loss of amenity caused by their short-stay guests.
Fabienne Loncar
Moray & Agnew Lawyers
E: floncar@moray.com.au
P: +61 3 8687 7319
This post appears in Strata News #666.
Question: A lot owner in our small scheme short term lets. Their renters are encouraged to bring pets. This has created mess around the exterior of the building. How do we stop this?
One owner in our eight unit building has not declared they are short-term letting their lot via Airbnb. Short-term renters stay for around five days.
On their Airbnb listing, the unit is advertised as ‘pet friendly’ and guests are encouraged to bring their furry friends with them for their stay. Guests have been taking their pets out the front of the building to ‘do their business’. This has resulted in a very unpleasant smell and mess at the entrance to our building.
How do we address these problems?
Answer: Model rules are applicable to short stay residents.
Short stay accommodation platforms such as Airbnb and Stayz have been a contentious issue for owners corporations.
When the Owners Corporation Act was amended Part 10 Division 1A – Complaints and procedures—short-stay accommodation arrangements was added.
In summary, this section deals with complaints and procedures regarding short stay accommodation.
It should also be noted, the model rules are applicable to short stay residents.
In this case, Model Rule 4.1 applies:
- If the owners corporation has resolved that an animal is a danger or is causing a nuisance to the common property, it must give reasonable notice of this resolution to the owner or occupier who is keeping the animal.
- An owner or occupier of a lot who is keeping an animal that is the subject of a notice under subrule (4) must remove that animal.
- Subrules (4) and (5) do not apply to an animal that assists a person with an impairment or disability.
Ingrid Goldenfein
OccamStrata
E: ingrid.goldenfein@occamStrata.com
P: 03 7042 5659
This post appears in Strata News #648.
Have a question or something to add to the article? Leave a comment below.
Read next:
- VIC: Q&A – Is There A Maximum Number of Tenants Allowed in Apartments?
- Strata & Airbnb: How to stop airbnb in your building
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we as a complex of units in Melbourne have a owner who has flooded her apartment and subsequesntly caused damage to adjacent apartment. oC called in plumbers to check comon pipes and no leaks fund so event was due to overflow from a internal sink or bath. Owner states they will not pay for any of assessment work or damage reclamation.
OC has paid for assessment but wishes Owner to pay for this and damage to adjacent apartment.
where does Owners corporation stand?
Hi Norman
Phillip Leaman from TISHER LINER FC LAW has responded to your comment within this article: VIC: Q&A Damage caused by a water leak from above
I am sure insurance companies will evolve. Changes are made everyday.
Though as of today, I would expect that the owners insurance will cover for any damage/s caused by their airbnb client, in exactly the same way as if you had your best friend staying over for the holidays and there was a flooding event.
In the meantime, Owners must do a better job of vetting their Airbnb clients until insurance companies catch up.
For insurance companies – I think this deserves a different insurance field rather than lodged under long term renters insurance.
I really don’t see why an owners corporation should be carrying the cost of insurance for damage to common property or another persons private property arising from an individual lot owner’s or tenant’s short term or holiday letting business, which is private profit making use of their lot.
It is not the same as your friend or family coming to stay, it is a commercial transaction that brings compete strangers into the property. In most cases the ‘host’ is not present, which might otherwise reduce the risks of these types of accidents or negligent or malicious damage.
It is a commercial activity and residential apartments and our shared facilities are not approved for commercial use? This is an example where owners as a whole being forced without to carry the externalised costs of an individual’s business activity. It is unconscionable that anyone should expect owners as a whole to subsidise their business activity.
I’d be very interested in other people’s views on this.