Can a class 3 building be used for long term residential use?

27 April 2016

This issue arose when we were consulted by an onsite manager of a complex originally approved and operated as a motel, appropriately classified a class 3 building under the Building Code of Australia, subsequently strata titled into some 65 individual units and now operated under a management rights arrangement.

Whilst the planning approval contained restrictions on the units being self-contained, for the purposes of this article, I will assume that the planning approval limited residential use to only short term usage typically found with motels and precluded permanent or long term residency.

Class 3 issue

The principal question we were asked was if the class 3 classification itself limited the units to short term usage.

The practical effect of a certificate of classification is that premises cannot be used for any purpose unless there is in place a certificate of classification applicable to that use. A certificate must state the building’s classification, having regard to the class of the building stated in relevant development approval (in the case no specific “class” was stated) and the use for which the building was designed [i] (in this case a motel).

The class 3 certificate in this case fulfilled these requirements. The Building Act and Building Code of Australia sets out what class 3 means and relevantly provides:

Class 3: a residential building, other than a building of Class 1 or 2, which is a common place of long term or transient living for a number of unrelated persons, including –

(a) a boarding house, guest house, hostel, lodging house or backpackers accommodation; or

(b) a residential part of a hotel or motel;

There are some important points to note about that definition: residential; long term or transient; number of unrelated purposes; and includes a residential part of a motel.

The classification itself does not preclude the residential units in the motel from being used for long term residential use.

Whilst long term residential use is generally associated with class 2 buildings, there is nothing in the Building Act or Building Code of Australia which only allows such use in class 2 or class 1 buildings. As the Victorian Court of Appeal stated, in ruling that a class 2 building could be used for short term residential usage[ii]: The purpose of the classification provisions does not require further implication of conditions as to use.

What this means is that it is the permissible use (under the planning approval) which determines the length of residential stay, not the classification – you do not infer from a class 3 classification that only short term use is permitted.

Just as the Court of Appeal found that use of the word “dwelling” in the class 2 definition did not mean that only long term residential usage was permitted, the absence of that word in the class 3 definition does not mean that only short term residential usage is permitted.

Another outcome of this is that even if the building cannot meet the class 2 standards, that does not matter as the class 3 classification itself allows for long term residential usage. A change to class 2 is not needed.

Therefore any action to prevent units in the scheme from being used for long term residential purposes would need to be taken under the Sustainable Planning Act where in such action, the class 3 classification of the building will be of no assistance.

Body Corporate and Community Management Act

The second question concerned the enactment of a by-law to limit residential usage to short term usage. However such a by-law would breach the Body Corporate and Community Management Act. Section 180(4) of that Act provides: “If a lot may lawfully be used for residential purposes, the by-laws can not restrict the type of residential use.”

Multiple decisions of the Office of the Commissioner for Body Corporate and Community Management have repeatedly ruled that by-laws that seek to impose limits on the type of residential usage are invalid. One might think that if a planning scheme or development approval limited the use to short term residential use, a by-law also imposing such a restriction would be lawful. However at least two decisions have stated otherwise. [iii]

There is as a general rule no restriction on the body corporate enacting a by-law requiring that owners and occupants comply with all relevant planning laws in relation to the use and occupation of lots in the scheme. Although I have been unable to find any cases on point, I expect that if the body corporate did so and then attempted to breach an owner for using a lot for long term residential usage, contrary to the approved use which permitted only short term use, the Commissioner’s Office would likely take the view that as the by-law indirectly breaches section 180(4) the body corporate cannot enforce the by-law but again must take proceedings under the planning legislation.

Appropriate enforcement action

Enforcing compliance with an approved use is permitted under the Sustainable Planning Act. Such an action would be taken in the Planning and Environment Court to prohibit owners or tenants from using units in the scheme for long term residency.

The onsite manager or the body corporate taking such action would be a dispute between with an owner, a dispute which under the Body Corporate and Community Management Act the Commissioner’s Office has exclusive jurisdiction to determine.[iv] However the Sustainable Planning Act vests exclusive jurisdiction for such enforcement action in the Planning and Environment Court [v] and it is considered that its jurisdiction will prevail and it is in that Court where action would need to be instigated.

[i] Building Act section 115

[ii] Genco & Anor vSalter & Anor [2013] VSCA 365 (12 December 2013)

[iii] “First Avenue Mooloolaba [2011] QBCCMCmr 241 (8 June 2011): “The body corporate cannot make rules that restrict the letting of units in the scheme, regardless of the separate question of whether other laws prohibit the letting of those units.” “…. the body corporate could choose to take legal action to enforce those laws. What the body corporate cannot do is make its own by-laws about the issue.”

Holiday North [2005] QBCCMCmr 688 (7 December 2005): “The Gold Coast City Council Town Planning Scheme does not require that Holiday North be used only for short stay tourist accommodation, and even if it did, the Body Corporate and Community Management Act 1997 would take precedence over subordinate legislation of Local Government.”

[iv] Section 229

[v] Section 436(2)