14 Jan 2014
Words Tim Admin

Clarity on Class 2 Building

In what is one of the most important decisions ever for the management rights industry in Australia, the Supreme Court of Victoria today handed down a decision as to the ability to use class 2 buildings (like most holiday and short term apartment buildings in Brisbane and the east coast of Australia) for short term and holiday accommodation. The decision overcomes the previous uncertainty generated by the former Queensland State Government’s discussion paper on the issue and clarifies the true position. The case concerned an appeal by a property manager to the Supreme Court from a decision of the Victorian Building Appeals Board. The Board had ruled that the use for short term accommodation of apartments in a class 2 building contravened the Building Act and the Building Code of Australia (BCA). The primary reason given for that was that reference in the class 2 definition in the BCA to “dwelling” did not extend to short term residential usage. Some apartment owners in the building at Docklands in Melbourne became parties to the appeal, also arguing that short term letting was unlawful. In handing down its decision, the Supreme Court ruled: The Board misconstrued the BCA when interpreting the word “dwelling” as excluding short term residential usage; The concept of dwelling encompasses short term holiday accommodation; There is no rational basis for limiting the word dwelling to just long term residential usage; Whilst the Board may be an expert tribunal, it does not have jurisdiction to make errors of law; Whether or not it was desirable for apartments in such buildings to be let out for short term accommodation was irrelevant; There was no evidence that the apartments being utilised for short term accommodation were a danger; and The Board erred in law in making its findings, its decision should be quashed and the matter sent back to a differently constituted Board for determination in accordance with the law. So whilst the matter has been sent back to the Building Appeals Board for further determination, the clear intimation from the Supreme Court is that the Board should follow the Court’s reasoning and make a final determination that a class 2 building can lawfully be used for short term and holiday accommodation.