Mel Developer Ban Buyers From Turning Their Apartments Into Airbnb

[Chen]

https://www.realestate.com.au/news/...-from-airbnb-leasing-in-melbourne-apartments/

Capital Alliance developer bans buyers from Airbnb leasing in Melbourne apartments

Nathan Mawby
05 JUN 2018

The Docklands luxury development will be among the Capital Alliance developments where buyers will be banned from leasing their apartments out short term.

A MELBOURNE developer is set to ban buyers from turning their apartments into Airbnb and other short-term rentals.

Buyers who breach their sales contracts could be hauled into court, face injunctions and even contempt of court if they ignored orders to stop.

The move follows heavy criticism of short-term stay rentals after a spate of incidents, including a Werribee home that was trashed during a wild party where police were attacked in December last year.


It also comes as the NSW state government yesterday agreed to let strata companies ban Airbnb letting in their buildings, and imposed a 180-night cap on renting properties through the service.

Victoria is currently reviewing whether to regulate short-term stay accommodation.

In the meantime, Capital Alliance will change the titles on their apartments to restrict owners’ rights to lease short term.

Capital Alliance founder and chief executive Mohan Du said the approach was motivated by incidents like the Werribee house used for a wild party, but also by seeing drunken tourists in the lift and halls to his apartment in the past — and because buyers wanted it.

“I used to live in Southbank and I experienced it first hand,” Mr Du said.

“There are so many things in the news now about people throwing wild parties and making people feel uncomfortable.

“And the buyers absolutely love it. Someone who is downsizing doesn’t want their neighbour changing on a weekly basis. They don’t feel safe.”

A hotel component of The Docklands development including a rooftop pool and bar would still be open to the public.

The newly announced NSW regulations would go a long way to fixing issues in Victoria, but in their absence it would fall to developers to find solutions, according to Ashurst real estate partner and lawyer Jason Cornwall-Jones.

“In Victoria, the owners corporations still haven’t been empowered and in the absence of that, we still have to think outside the square,” Mr Cornwall-Jones said.

“If someone breaches the restrictive covenant you can seek to have that enforced in court and get an injunction against them,” Mr Cornwall-Jones said.

“It’s still not a criminal offence … but if the court orders you to do something it would be a very, very brave person who said they were going to ignore the order of the court.”

He added that he did not believe future buyers, or tenants, would be able to object to the covenants, as they could not be sold or leased a use of the property that the initial owner did not have the right to provide.

“There’s a legal maxim that no man can grant more than he holds,” Mr Cornwall-Jones said.

The Docklands development being developed by Capital Alliance will be the first affected, and will also house a new five-star Marriott hotel.

Mr Du said while he had not discussed Airbnb with the hotel operator, he expected other hoteliers and developers would be paying close attention to their efforts.

The Docklands is 52 per cent sold after less than three months on the market, with the majority of buyers local downsizers.

Capital Alliance’s approach reflected how quickly short-stay leasing had changed things, according to Tourism Accommodation Australia Victoria general manager Dougal Hollis.

“The consideration of a piecemeal approach by developers to control such activity reinforces the need for government to instead consider overarching regulation of quasi-commercial Airbnb style accommodation in a residential setting,” Mr Hollis said.

“(And) to provide clarity for all stakeholders regarding how such laws will apply in Victoria.”

An Airbnb spokesman yesterday welcomed the NSW government decision, saying the new rules announced would make it easier for homeowners to make additional income.

“This truly is a watershed moment for our community in Australia and for travellers from around the world who want local, authentic and unique experiences when they visit,” said Airbnb country manager for Australia Sam McDonagh.

“The rules will be a boost for the NSW economy and a welcome relief for the countless small, local businesses who rely on the Airbnb guest dollar.”

They did not comment on the Capital Alliance ban.

 

[166news]

Neighbours' lives turned upside down by Airbnb and other 'disruptors'

By Clay Lucas 25 July 2018 — 11:50am (Fairfax press)

As Airbnb has boomed, scores of competing homesharing websites, and established travel sites, have joined the frenzy.


Premier says Airbnb rules may change after teen's death in tower block


Some, like Port Melbourne host Gillian Butler are the very model of sharing economy success.

The ground floor of her three-storey building is used for a business. The two floors above, which Ms Butler once rented to her children, are now on Airbnb.

“I love it because I can call the shots,” says Ms Butler, who enjoys meeting people from all over the world.


Ms Butler is the sort of success story Airbnb and other sharing sites use to promote a system used by 1.8 million guests in Melbourne last year, one which Deloitte Access Economics says now contributes $413 million to Victoria's gross state product.

There is no stopping Airbnb and other companies now – in part because it is so popular with travellers.

But Eq Tower’s Ms Hughes says the idea companies such as Airbnb are trying to maintain – “a sharing concept – rent out a bedroom if you have a spare” – is increasingly a fiction.

“Now it’s a business designed to help people get cheap accommodation and for investors to make more money,” says Ms Hughes, who argues “the sharing economy” is slowly transforming into an economy where neighbours such as herself are being asked to foot the bill for other peoples’ profits.


This is hardly news to the Victorian government – and yet it has done nothing.

More regulation
Labor came to office promising to “improve the regulation of CBD residential buildings, so property is protected from unruly ‘short stay’ parties”.

The government’s response to an inquiry analysing its proposed short-stay bill found that “anecdotal evidence” indicated “some apartment residents currently feel unsafe in their buildings”.

That anecdotal evidence is starting to turn into a flood of hard evidence.


In the wake of Laa Chol’s death, outraged residents contacted The Age with remarkably similar tales of hell caused by short-term lettings.

Among them is Jack Clarke, who in 2008 moved into his Queens Road apartment with housemate Peter Itchins. They had no problems with the apartment upstairs until last year, when it was placed on Airbnb.

Now, he says, parties regularly rage upstairs into the early hours of the night, suitcase wheels scrape across their ceilings, there is regular loud singing and dragging of furniture above them.

Mr Clarke, a tax lawyer, has scrupulously documented his complaints, which range from confronting a scared woman with a blood nose to regular trips upstairs at 2am to demand the noise is kept down, to encountering groups of up to 15 people staying in the three-bedroom apartment.

Mr Clarke has contacted Airbnb repeatedly; the company’s response is it is powerless to act. (On Wednesday, an Airbnb spokesman told The Age it was investigating the complaints again.)


The pair’s negotiation with the apartment’s owner, Mr Clarke says, has resulted in everything from offers of cash bribes to a threat of an apprehended violence order against them.

Short-stay crackdown
While Victoria has done nothing to regulate the short-stay industry, governments elsewhere have cracked down on Airbnb and other platforms.

In Sydney, laws may soon be passed so that apartments can’t be let for more than 180 nights a year and a vote of 75 per cent or more of owners in a block can ban short-term lettings outright.

Japan is set to enforce tougher laws on apartment sharing, and protest movements in cities including Venice, Berlin and San Francisco have seen residents publicise how short-term lets are forcing out long-term locals.


The Greens MP for Melbourne, Ellen Sandell, was elected in 2014 and has regularly been contacted by residents affected by the rise of Airbnb and other home-sharing sites.

She says, while Labor promised to tackle the issue since the last election, they didn’t really want to do anything. "It’s taken a crisis for Daniel Andrews to become interested”.


While Airbnb has become a verb for the online short-stay industry, the proliferation of other sites has made it harder for neighbours to resolve their problems.

'They're absolute pigs'
Yarra Valley resident Maddy, who asks that her surname not be used, says her short-stay nightmare began in 2016 when the house next door was sold to investors.


“The first weekend they rented it out, we were just like ‘Holy moly!’. Thirty people turned up, there were people everywhere sleeping in cars."

Now, Maddy dreads weekends, when the house is leased for $300 a night. Listed on Airbnb, Booking.com, Homeaway, HomeToGo, Trivago, TripAdvisor and Expedia, among others, Maddy is never clear which platform to complain to.

Usually the house is rented by wedding parties, with groomsmen arriving on a Friday. “They party all night and they are absolute pigs,” says Maddy, who then watches as their guests arrive on Saturday. “The party starts again on Saturday night once the wedding is over.”

When Maddy has complained to the police, if they come at all, it’s obvious who's called them. “Then you've got 20 drunken people in there, and you feel in danger, so I don't do that.”

Maddy has also complained to the Yarra Ranges Council, but they say they are powerless to act.


Linda Wimetal has learnt the hard way how powerless councils are to take meaningful action against owners of short-stay lettings who do the wrong thing.

Her home in Rye is next door to a large family home that was once rented to a family.


EDITORIAL
Short-stay legal reforms have stayed too long in state's upper house
Now, “it’s like having them partying in my bedroom at night it’s so loud,” she says, describing this past summer as “from hell”.

Her local council, Mornington Peninsula, has tried valiantly to help her and hundreds of others affected by the peninsula’s 1185 short-stay lettings.


Officers from the council installed noise-monitoring equipment, got evidence it breached the Environment Protection Act and served notices on the owner.

It solved the problem for a while, but 18 months later the owner re-listed the property on Airbnb.

“We were back to square one,” says Ms Wimetal, who says only one thing will help her: stronger laws.