People living in apartments will not be able to stop other landlords renting their properties on Airbnb to short term tenants, a landmark Supreme Court decision has found.

In a decision that clears the way for Airbnb and other short-term leasing sites to freely operate in Melbourne's apartment buildings, the Victorian Supreme Court found owners corporations could not make rules to ban short stay operators.

The decision is likely to cause further friction among the rising number of people choosing to live in apartments who say their properties are over-run by 'partying' short-stay tenants intent on living it up.

Residents complain such tenants leasing through US-based websites like Airbnb and Couchsurfing are noisy and cause damage to common property like lifts and corridors that are not designed to cope with large numbers of visitors.