The Victorian Government is clinging resolutely to its “come on down” attitude to Airbnb and other holiday lets.  Make that: “Party on, dudes! Nobody gives a damn about strata residents, anyway.”

An independent expert panel’s suggestion of ways to rein in party flats in apartment block holiday lets has been rejected out of hand by the Victorian Government.

Buried in its response to the statutory review of the Owners Corporations Act 2006 published this week, is a short-stay chapter that reads less like a crackdown and more like a polite explanation of why change isn’t really necessary.

Of the seven short-stay recommendations the panel put forward, two were knocked back flat, one was quietly gutted, two were waved through only “in principle” – and on the conditions that other reforms happen first – and a potentially genuinely useful review has been pushed years down the track.

The beat goes on

The most eye-catching knock-back is the rejection of the panel’s call for an occupancy limit on lots used as short-stay accommodation – the obvious lever for stopping a two-bedroom apartment being rented out to thirty people for a buck’s night.

The government’s answer? No way, Boomer! The beat must go on.

The government response concedes, in black and white, that parties in short-stay lots cause a “loss of amenity” for the neighbours. But it then argues the Act already has the tools to deal with it – owners corporations can make rules about noise and nuisance, residents can drag offenders off to VCAT, and loss-of-amenity compensation orders are theoretically available to the aggrieved.

What it neglects to say is that these things are notoriously ineffective. Anyone who has actually tried to enforce an OC rule against a rotating cast of weekend strangers will recognise the gap between “tools exist” and “tools work”.

By the time a complaint winds its way to a tribunal, the guests who trashed the foyer are long gone, the tenancy of the party flat has changed (if only in the name on the lease) and a fresh set of hellraisers has checked in.

Register? What register?

The panel also wanted a mandatory notification scheme so that owners corporations – and the regulator – would actually know which lots are being used for short stays, underpinned by a central register.

The government has taken half the loaf. Owners running short-stay lets will have to tell their OC. But the central register? Gone. Too much “administrative burden”, apparently, and too tricky to collect and disclose the information.

So owners corporations will get a heads-up about their own building, but there will be no central, government-held picture of how widespread short-stay letting actually is across Victoria – which is precisely the data you’d need if you ever wanted to regulate the sector properly.

“In principle” – with strings attached

Two further recommendations – penalties for breaching short-stay duties, and giving short-stay disputes access to the same mediation and regulatory muscle as other OC disputes – were supported only “in principle”.

And even that support comes shackled to other reforms: the penalties and enforcement powers can’t apply to short stays until the broader new penalty framework and the regulator’s expanded powers are bedded down first.

In plain English: don’t hold your breath.

The one recommendation that got a full tick without a catch was a feasibility study into financial safeguards such as bonds and levies. A study. To explore options. To then possibly do something.

The five-year snooze button

Then there’s the definition of “principal place of residence” – the linchpin of the 2024 reforms that let owners corporations ban short-stay letting in lots that aren’t someone’s actual home. The panel suggested aligning the definition across the relevant Acts.

The government declined, insisting the term is already well understood by the courts. Maybe so, but it’s not comprehended by strata committees and holiday let hosts.

That matters because of the Balcombe case, in which the Supreme Court found the legislation didn’t actually give owners corporations the power to ban lots being used for “any trade or business”. The panel sensibly asked the government to review the 2024 changes in light of that decision.

The government agreed – then announced the review won’t happen for up to five years, on the grounds the reforms need “sufficient time” to prove themselves.

The bottom line

Strip away the official language and the message to apartment residents fed up with short-stay churn is fairly blunt: the rules you already have will have to do.

The government’s faith is firmly pinned on the Short Stay Levy Act 2024 and the existing OC framework, and it is clearly reluctant to layer new restrictions on top while those changes are still being tested.

For owners who were hoping the review might finally hand them real power to keep the party flats in check, it’s a familiar Victorian outcome – plenty of acknowledgement of the problem, and a careful, unhurried decision to do very, very little about it.