Grant Smee
Only Realty Property Group
CEO
With short-term letting and, more specifically, Airbnbs ramping up in South Africa, disgruntled owners and tenants are voicing their concerns regarding short-term letting properties in complexes, estates and apartment blocks.
“While freehold property owners can act freely, sectional title property owners are bound by a different set of laws,” says Grant Smee, CEO of Only Realty Property Group.
Complaints around noise, parking, property damage and, most importantly, security in sectional title buildings are ongoing, with Smee adding that corporate bodies have begun to implement short-term letting rules and that new regulations may force owners to adopt a long-term letting strategy in future.
Smee adds that complaints and concerns relate to a tiny minority of short-term rental properties. “We still strongly encourage short-term letting as a positive investment strategy, and with interest rates at a multi-year low, we foresee more short-term rentals coming to market,” he says.
“We have unpacked the rules and regulations of short-term letting within a sectional title building to bring further clarity to the process and any actions that may be taken in the event of mishaps.”
Rules and Regulations Around Short-Term Letting Unpacked
Under the Sectional Titles Management Act (STSMA), property owners must inform the body corporate when they lease out their units, and the owners must ensure that tenants receive – and adhere to – the scheme’s conduct rules.
“A body corporate has the authority to establish and amend conduct rules that govern the use of individual units and common areas,” explains Smee.
Body corporates may impose a minimum lease period (such as six months) or ban short-term rentals entirely (in rare cases). “However, these rules must be reasonable, applied equally to all property owners, and approved by the Community Schemes Ombud Service (CSOS).”
In addition to rental restrictions, body corporates may implement strict record-keeping and rule dissemination policies.
“At a municipal level, specific by-laws and regulations can influence the operation of short-term rentals; therefore, it’s important that property owners clearly understand their zoning restrictions and whether they require special permission.”
Beyond municipal and body corporate regulations, new government regulations are underway to further regulate short-term letting in South Africa. “These regulations may include mandatory registration, adherence to health and safety standards and the payment of hospitality taxes.”
Tips for Short-Term Letting Landlords
While these rules and regulations may sound daunting, Smee once again highlights that mishaps and aggravated cases are the exception – not the rule. “Most landlords welcome well-informed, well-behaved guests to the premises, but in reality, some guests will not understand – or adhere to – body corporate rules and may compromise security if not properly screened.
Smee shares his top tips for landlords looking to embark on a short-term letting venture or wishing to comply further, as follows:
Open lines of communication: “The biggest issue in cases like these is a lack of communication. Be open, engaging and transparent in your dealings with your body corporate so that you can work together throughout.”
Have a firm understanding of the rules: If you haven’t already, then Smee encourages you to carefully examine the scheme’s management and conduct rules to understand any restrictions on short-term letting.
Stay informed: Stay updated with any changes in legislation, scheme rules and by-laws to understand how these may affect your short-term letting strategy.
Tenant collaboration: Before accepting a booking, ensure you have checked your tenant’s previous letting history. Also, ensure that they understand the rules upfront and that these are communicated in a way that’s easy to digest.” Rather than copying and pasting the body corporate rules, Smee suggests including bite-sized snippets such as ‘Parking in bay one only. Visitors are to park in visitor’s bays, and permission to be requested from the landlord before arrival.’
“Owning a short-term rental property remains an exciting opportunity, and with the right management, it can be highly successful despite evolving regulations. While security and other concerns are valid, staying proactive, informed and hands-on in the process is key to ensuring a smooth and profitable experience,” he concludes.