18 January 2021

Knightsbridge owner moves to change lease to include guest house

| Ian Bushnell
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The Knightsbridge apartment complex in Kingston is still operating. Photo: File.

The owner of Kingston’s upmarket Knightsbridge apartment complex, which had been found to be running an unauthorised hotel on the site, has moved to change its lease to include ‘guest house’ as a use so it can continue business as usual and head off a deadline to close.

Late last year the ACT Civil and Administrative Tribunal found Josip Zivko’s Quanton property group was in breach of the Crown lease after the Australian Hotels Association sought a control order, arguing Quanton was running commercial accommodation premises in a residential zone.

The AHA had made numerous complaints to the ACT Government before taking the matter to Access Canberra in August 2019, only to have the ACT Planning and Land Authority dismiss the concerns.

It then took the Authority to ACAT, with Quanton as a party to the proceedings.

In a decision thought to have ramifications for similar enterprises in residential areas, ACAT found that Knightsbridge was a commercial operation and the use of the land was not for residential purposes.

READ ALSO Tremors for serviced apartments: ACAT finds Knightsbridge in breach of lease

It is believed an order issued before Christmas gave Quanton until 2 February to cease operations, but now it has lodged a development application seeking to vary the lease purpose clause to add guest house as a use.

A guest house usually includes a shared kitchen and laundry, like a bed and breakfast, but apparently can be located in an RZ5 High Density Residential Zone.

If the planning authority grants the lease change, the company may maintain the business as is, but the decision could open up other planning questions down the track, particularly if similar enterprises follow suit.

This may defeat the intent of ACAT’s decision, which was to close a planning loophole and support orderly development in the Territory.

Built in 2017, the Leichardt Street complex offers serviced apartments as well as amenities such as a gym and a pool, and advertises on accommodation sites such as Trivago.

The ACT Government granted the owners a Crown lease in March 2015 to use the land for “the purpose of multi-unit housing”. The block is zoned for high-density residential use, which bans commercial accommodation uses.

ACAT found that under the Territory Plan, ”residential” refers to occupation that must have a degree of permanence, and there was no evidence of this in the Knightsbridge operation.

”The evidence overwhelmingly supports the inference that KFA [Knightsbridge Furnished Apartments] operates some kind of commercial accommodation enterprise, probably in the nature of serviced apartments, upon the land,” it said.

ACAT said Quanton had offered an “everybody else is doing it” defence that only confirmed the need to curtail such enterprises.

The AHA declined to comment on the lease change application.

Public comment on the DA closes on 2 February.

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