Short term rentals in sectional title schemes can be problematic to manage

A recent trend is short-term letting of residential sectional title units as holiday accommodation, which often are specifically bought for this purpose. 

Certain online portals make this activity easy by the general public to do this themselves and the popularity of doing this to earn a much greater income without the hassle and risk of long-term leases, is gaining momentum, but there might be serious implications when the unit being let is in a sectional title scheme and the owner of the unit has not taken the rules into account, says Michael Bauer, general manager of the property management company IHFM.
In the majority of sectional title schemes the rules will specify that a short term let is anything under six months, and that this is not allowed. The rules might have been set this way specifically because the owners want the security to remain “tight” and they do not want the perceived complications of having many different people in the complex over a period of time.
Bauer has recently encountered cases where the trustees of schemes have allowed owners to rent out their units as holiday accommodation, thereby going against their own rules, and they now have to rectify matters, either by changing the rules to allow for short-term letting to take place or by putting a stop to all the short term rentals.
As with anything, there are pros and cons to short term letting, and it’s not to say that a holidaymaker will cause any more damage or disruption in a unit than a long term tenant. The trustees could also argue that security issues might arise if there is constant turnaround of keys and access tags, but even long term tenants can lose these or let people in that are not savoury, said Bauer.
What has to be assessed is whether the owner of the rented unit has a means of enforcing the conduct rules with his tenants and if the correct behaviour is maintained, then short term letting could be allowed.
If there is a dispute as to whether to allow short term letting, the trustees should call a special general meeting to ask owners what it is they want and to get a special or unanimous resolution to vote on the changing the rules. If the owners vote in favour of a decision needed to bring about the change, the trustees can then either set about changing the rules to allow for short term letting or notify everyone involved that it is no longer allowed and that the rule will be enforced.
Trustees and owners must be reasonable in dealing with this sort of problem, as long as punitive measures can be put in place to protect the rest of the owners in the scheme, the owners who do rent out their units should be able to continue to do so. This could be in the form of additional levies to cover extra security and access tags, for example, said Bauer.
It is, however, up to buyers of units that intend renting them out as holiday accommodation, to check the rules before signing an offer to purchase. If the rules stipulate that this is not allowed, another complex should be considered, he said. 

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us