A new set of rental rules in Victoria, which were formalised during the recent Victorian Civil and Administrative Tribunal (VCAT) hearing, could potentially put an end to short-term stay rentals.

The rules included requiring tenants to give a three-day notice before moving in and attend an induction, as well as requiring owners in the building who overuse the induction process to pay for extra charges, according to a report by realestate.com.au.

This came after Zheng Sheng Lim, co-owner of an apartment in the Imperial building at Sovereign Point Court, Doncaster, successfully challenged the rules that were supposed to ban short-term stays.

Tony Mosca, Imperial owners corporation chairman, said that while a rule prohibiting short-stay rentals of less than three months had been acknowledged as “probably invalid” before the VCAT hearing was finalised, these newly approved rules would allow owners corporation to control the tenants’ length of stay.

“An owners corporation can’t stop Airbnb. What we can do is put in rules so that people can’t come and go willy-nilly, without knowing who is in the building. It’s a de facto mechanism that means we can control who comes and goes,” Mosca said.

As a result of the decision, owners in the building would find it hard to follow the building’s rules and operate short-term stay rentals.

The requirement that prospective owners would pay an extra $100 for any additional inductions beyond two in a year and a $300 fee if they required an induction outside of business hours also discourages short-term leasing, since it makes this type of renting less financially viable.

Rob Beck, Strata Community Australia Victorian boss, welcomed the rules, saying that it is a timely update to the legal landscape for owners corporations, particularly with relation to short-term stays.

“We’d welcome interpretations that help owners corporations govern and keep the peace between owners and tenants,” Beck said.