Leaseholders consider class action against AAA Tourism

A group of accommodation providers are considering a class action law suit against AAA Tourism over the management of its Star rating scheme.

In a statement issued this week, the Star Rated Properties Group says:

“A growing group of unhappy star rated property owners has banded together to fight the impending fall-out from the new Star rating program. The group is seeking legal advice and believes there may be grounds for individual operators and owners to sue AAAT for damages to their businesses if they suffer a termination of their lease or incur substantial costs of refurbishment to have their properties comply with new AAAT Star rating evaluation standards after the moratorium ends in October 2013. Opting out of AAAT is not an option that complies with the leases and the group believes there may even be scope for a class action law suit.

“At the end of 2011, AAA Tourism introduced major changes to its Star rating program that significantly altered the way assessment inspections were evaluated. AAAT also granted a moratorium to accommodation properties that received a Star rating downgrade to give them time to implement the necessary changes to retain their star rating. Although AAAT asserts the new assessment criteria was developed in consultation with the industry it appears the wider ramifications of the new Star rating program on leasehold property owners was not foreseen.

“Since the new assessment criterion was put into practice a substantial number of accommodation providers have received a down grade of their Star rating. For many leaseholders, a downgrade in Star rating means they are now in breach of the terms of their lease that requires the lessee to maintain the existing Star rating.

“Leaseholders throughout Australia are facing the possibility of losing their leases or being up for $100,000s of renovation costs that would have not been necessary a year ago under the previous AAAT assessment criteria. Even if the leaseholders can successfully argue that some of the renovation works required to meet AAAT’s requirements is the lessor’s responsibility, someone is up for huge costs if the previous Star Rating is to be maintained. Leaseholders are asking: ‘If AAA Tourism has shifted the goal posts, why should we be responsible for the required refurbishments when our lease agreements were based on the old assessment criteria?’

A common theme of complaints from numerous operators is being advised they need to replace the bathroom vanities, shower units, floor tiling, replace bathroom wall tiling with ‘contemporary’ floor to ceiling tiling, bench tops, room lighting to be halogen down lights and replace perfectly good air conditioners with ducted air conditioning systems in order to keep their Star rating.

“An operator who wishes to remain anonymous said: ‘The inspector seemed unconcerned her recommendations would cost over a $100,000 to implement and was unapologetic that last year she offered us the opportunity to be raised from 4 stars to 4½ but now we are facing a downgrade to 3½ stars. It just doesn’t make sense.” An operator of a motel in Mackay reports they had replaced all of the carpets in the motel after the floods but were told by the AAA inspector they needed new carpeting. When challenged that the carpets were new, the inspector replied that they should have used wool carpets.”


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