With short-term letting – and more specifically, letting through Airbnb – ramping up in South Africa, disgruntled owners and tenants are voicing their concerns when it comes to short-term letting properties contained in complexes, estates and apartment blocks.

“While freehold property owners can act freely, those who own sectional title property are bound by a different set of laws and rules,” says Grant Smee, CEO of Only Realty Property Group.

As complaints increase around noise, parking, damage to property and most importantly, security in sectional-title buildings, body corporates have begun to implement short-term letting rules. Furthermore, new regulations may force owners to adopt a long-term letting strategy in future.

Smee notes, however, that complaints and concerns relate to a small minority of short-term rental properties. “We do still strongly encourage short-term letting as a positive investment strategy, and with interest rates at a multi-year low, we do foresee more short-term rentals coming to market,” he says.

“We have however 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

Under the Sectional Titles Management Act (STSMA), property owners are obligated to inform the body corporate when they lease out their units, and 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 choose to 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 also 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 and therefore it’s important that property owners clearly understand their zoning restrictions and whether they require special permission.”

Beyond municipal and body corporate regulations, government is considering implementing new regulations 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.

While these rules and regulations may sound daunting, Smee once again highlights the fact that mishaps and aggravated cases are the exception, not the rule.

“The majority of short-term guests are well informed and well behaved, but there will always be some guests who won’t understand – or adhere to – body corporate rules. If proper screening is not done, such guests may compromise security.

Tips for successful short-term letting

Smee shares his top tips for those looking to embark on a short-term letting venture.

Open lines of communication
Many problems come down to a lack of communication. Be open, engaging and transparent in your dealings with your body corporate so that you can work together.

Have a firm understanding of the rules
If you haven’t done so already, carefully examine the scheme’s management and conduct rules to understand any restrictions on short-term letting.

Stay informed
Keep up-to-date with any changes in legislation, scheme rules and by-laws to understand how these may affect your short-term letting strategy.

Tenant collaboration
Where possible – and prior to accepting a booking – check your tenant’s previous letting history. Also, clearly communicate the rules upfront in a way that’s easy to digest, and ensure that they understand the rules. Instead of just copying and pasting the body corporate rules, rather include bite-sized snippets of the most important rules that would apply to a short-term tenant.

Short-term letting can be successful

“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,” Smee concludes.

This post was based on a press release issued on behalf of Only Realty Property Group.