Court fight over move to outlaw short term stays at Realm tower

Moves to outlaw short term rentals in a luxury CBD apartment tower have been blocked in the District Court – but the fight is not over.

The developer and rental manager of the luxury CBD Realm apartments have won a court injunction halting two meetings to change building management bylaws that would stop owners renting their properties for short terms.

In an urgent hearing in the District Court late Monday, lawyers acting for Realm Property Management Pty Ltd and developer Eklipse Capital Pty Ltd successfully halted moves for the meetings, planned for today and tomorrow by the building’s two community corporations, to consider the bylaw changes.

The claim also seeks an order restraining the two corporations from altering bylaws to prevent short term rental of apartments.

Realm tower, just off Pulteney St, is Adelaide’s latest luxury apartment complex with its two-storey penthouse purchased by fitness guru Tobi Pearce for $5.23m last December.

Mr Pearce is not involved in the case.

The meetings of the two community corporations – the low rise corporation that represents 150 owners on floors eight to 20 and the high rise corporation that represents 160 owners on floors 21 to 39 in the Austin St building – were called earlier this month to consider special resolutions to change the bylaws to prohibit apartment owners from renting their apartments for periods of less than two months.

Realm Penthouse in Austin St, Adelaide. Picture: Jonathan Kissock.

District Court documents state the move to change the bylaws is being spearheaded by apartment owner Brendon Whiting, the presiding officer of the high rise corporation.

The documents state in August last year Mr Whiting, on behalf of an unidentified group of apartment owners, offered Michael Song, the sole director of RPM Pty Ltd, more than $1.25 million to purchase RPM’s interest in the letting and caretaker agreements. This was rejected by Mr Song.

The documents state in mid-November the committee for the high rise corporation gave notice of an extraordinary general meeting to be held on December 7 to consider a special resolution to amend the bylaws to prohibit short term rental.

The documents state Mr Whiting was in breach of the Community Titles Act in that he did not disclose to the committee that he had a pecuniary interest in the resolution. The resolution was not voted on at the December 7 meeting because of a lack of proxy votes.

In handing down her ruling yesterday, Judge Jane Schammer said she felt it “was not appropriate’’ the meetings go ahead until all apartment owners had been made aware “these proceedings are under foot.’’

The Realm Penthouse. Picture: Jonathan Kissock.

She ordered that no meetings of the two community corporations be held before April 13, that the corporations be restrained from changing any bylaws concerning short term rentals and that a defence to the claim by the two applicants be filed within 28 days.

Since it was completed in July 2020, Eklipse has sold 287 apartments in the complex and still owns another 23 apartments. RPM has property management agreements with 73 apartment owners and receives commission of 7.7 per cent on any rental income.

If it proceeds, the bylaw change could potentially expose all owners of the apartments to significant compensation likely to be sought by RPM Pty Ltd from the two community corporations for loss of rental management income.