Rental boom - might cause problems

Catherine Cockcroft, sales manager of Propell, a levy funding and collection company, says this situation particularly applies to sectional title properties.

"Although the current situation will be welcomed by landlords it carries with it the danger that the proportion of tenants in sectional title schemes will rise exponentially," she says.

"In many schemes with a high percentage of tenants, the upkeep of the units and the general conduct all too often are compromised ? and? when Propell is commissioned to assist projects in distress, serious financial problems often go hand in hand with equally serious tenant issues."
She says buy-to-let investors are often lackadaisical about control of their tenants. Often the perception is that this is the responsibility of the trustees, the managing agents or, possibly, their rental agents.

"In reality, the Sectional Title Act 95 of 1986, which is binding on the body corporate, owners of sections and any person occupying a section, and the Prescribed Management Rules, obligate owners to ensure that conduct and behaviour guidelines are complied with.

"The owners of sections are also responsible in terms of the Rental Housing Act for attaching copies of the scheme's rules to lease agreements to ensure that the tenants are made aware of them, and, where tenants disregard these rules, the owners will ultimately be held responsible.
"With a steady increase in the numbers of tenants in sectional title units, responsible trustees should ensure that the rules deal with potential issues related to security and overcrowding. These problems crop up regularly in multi-tenant schemes where control has grown lax.
"Right now I would agree with Clarke that there are no better property investments than the sectional title sector. As the last Absa survey has shown, this sector is the one faring best pricewise. If, however, large-scale renting takes over from owner-occupants, strict vigilance will be essential to ensure that standards are maintained."

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