Starting from January 1, 2025, a new law in Victoria will permit owners corporations to create rules prohibiting short stay accommodation arrangements.
This is a significant shift from a previous Victorian Supreme Court decision of Owners Corporation PS501391P v Balcombe [2016] VSC 384 which stated that owners corporations did not have the authority to significantly interfere with lot owners’ proprietary rights.
For existing owners corporations, the rules to ban short stay accommodation must be made by way of a special resolution (meaning that 75% of the lot owners must support the rules) and must align with any local council rules.
For new owners corporations, the developer can establish these rules upon creation of the owners corporation, provided they are consistent with local council rules. These rules should be disclosed in the draft OC rules attached to the off-the-plan contract of sale.
The new law stipulates that these rules will not apply to lot owners or occupiers using their lot as their primary residence, such as renting out their lot short-term while away.
