An elderly gay couple has been ordered to take down a gay pride flag from their apartment balcony in Port Melbourne, with the body corporate threatening them with legal action if they did not comply.

Murray Sheldrick, 78, and James Bellia, 72, received what they said was a "nasty" email from the Melbourne Inner City Management Property Owners Corporation on Wednesday last week, demanding that the couple remove the flag from their Rouse Street balcony, or risk a legal case in the Victorian Civil and Administrative Tribunal.

James Bellia and Murray Sheldrick on the balcony of their Port Melbourne apartment, after being told to stop flying their flag. Credit:Wayne Taylor

The letter, seen by Fairfax Media, warned the couple were in breach of the owner's corporation rules affecting the "peaceful enjoyment" of the other residents.

The breach was described as "displaying advertising material" and the residents were instructed to remove the flag immediately. It was unclear from the letter what was being advertised.