The Tenants Union of Victoria (TUV) has welcomed a ruling that body corporate rules prohibiting residents from having pets are invalid.

In June, the owners corporation of an Eaglemont subdivision went to the Victorian Civil and Administrative Tribunal (VCAT) seeking an order requiring resident Madison Brewster to remove her cavoodle from her rented townhouse.

Ms Brewster had her landlord's permission to have the dog, but the subdivision's owners corporation had passed special rules in 2013 prohibiting pets from common property and private lots.

VCAT Member Linda Rowland found the special rules were "invalid and of no effect" because they unfairly discriminated against pet owners.

TUV chief executive Mark O'Brien told 774 ABC Melbourne's Red Symons the ruling could help people facing similar disputes with their owners corporation.

He said the health and psychological benefits of pet ownership were well known.

"A blanket ban that says you're not even allowed to own a goldfish is clearly ridiculous."

Roger Gardner, Victoria's president of the Owners Corporation Network, said it was his personal view that a blanket ban on pet ownership was "a bit harsh".

"There is no reason that a dog that does not play up could not stay in an apartment, and any individual case can be taken up with the building manager," he said.

No nuisance dog to stay, with conditions

In her ruling, Ms Rowland found the owners corporation did not have the legal power to prohibit pets from private lots.

"In my opinion, the power under [the Act] to control noise and nuisance and the behaviour of persons does not give an owners corporation power to prohibit an otherwise legal activity on the basis that it would prevent a possible noise or nuisance," she said.

The ruling noted there was no evidence the dog was dangerous or causing a nuisance.

Ms Rowland said there was nothing necessarily unfair about prohibiting pets from common property and said it was reasonable to prohibit pets from shared swimming pools or gymnasiums.

However, she said the townhouses in question were "similar to a row of terraces" and there was no evidence that an appropriately restrained dog could interfere with other residents' enjoyment of the subdivision's common property driveway.

VCAT ordered Ms Brewster to restrain her dog while on common property until March 1 "to enable the owners corporation to pass and register an effective rule if it chooses to do so".

Pet ownership 'massive issue' for tenants

Mr O'Brien said the ruling would not affect no-pets clauses that are commonly inserted into rental tenancy agreements.

"Owning pets, if you're a tenant, is a massive issue," he said.

He said pets should be negotiated between landlords and tenants based on the type of animal and the size and scale of the property.

Mr O'Brien said the make-up of the rental market had significantly changed in recent years and more flexibility was needed.

"The most common form of household in the rental market is families with children."