29 May Sectional title tenants: What is the owner’s responsibilities?
Not all sectional title investors elect to live in the complex where they purchased a unit. It is quite common to buy in sectional title schemes with the intention of letting.
Body corporate requirements
Renting out an apartment is not always as simple as it may seem. The body corporate may have rules around how long an apartment may be rented; it is also possible that the conduct rules were amended to prevent owners from letting their apartments. However, this is not the norm and where the body corporate has not amended the rules, owners who want to rent out their apartments do not need the approval of the body corporate.
Other body corporate requirements may include that the owner needs to provide information pertaining to the lease agreement. The Sectional Titles Schemes Management Act requires that owners must provide the details of their tenants to the body corporate. This information must include the name of the tenant, their contact number, copy of identification document or visa (if not a SA citizen) as well as their email and mailing address.
Short term letting
With the introduction of the short-term letting phenomenon that is Airbnb, an increasing number of owners have opted to pursue this lucrative revenue stream versus securing long-term tenants. In many cases, this is having a major impact on the standard of living for owners living in their apartments. This has also impacted how schemes are managed by trustees and managing agents.
A general problem with short-term letting is that visitors are generally unaware of the scheme’s conduct rules and often behave in an inconsiderate manner, negatively impacting the other residents in the complex. Loud noise and disturbances late at night are high on the list of complaints.
Visitors tend to ignore other residents and leave the owners of the apartment having to deal with complaints from the body corporate. The biggest concern is the security risk involved in unknown people entering and exiting buildings throughout the day with little or no control.
How to control short term letting
The prescribed conduct rules contained in the Sectional Titles Schemes Management Act provide guidelines to owners on how their visitors or tenants need to conduct themselves in a complex.
The rules do not allow for any disciplinary or financial implications if the rules are breached. This can be overcome if the body corporate amends its rules to allow for fines and penalties to be imposed.
In order to do so, the body corporate must arrange a special general meeting where the proposed rule amendments or additions are tabled for approval. Once these rules have been approved by the Chief Ombud, the body corporate can rely on the rules to impose fines and penalties on owners who have tenants transgressing the rules.
It is important to note that even in situations where tenants transgress, the owner of the apartment must be given the opportunity to state their case and rectify any transgression before a fine or penalty may be imposed.
Unhappiness with rules of scheme
An owner who feels that the body corporate rules are unfair or unreasonable may lodge a complaint with the local Community Schemes Ombud Service (CSOS) for relief. The Ombud can either rule that the rules are enforceable or that it must be reconsidered if deemed unreasonable or unfair towards any owner.
Short-term letting will likely remain an area of difficulty for trustees to manage, mainly due to the lack of concrete legal rulings by the South Africa Courts. Until a High Court ruling has been established in this respect, owners will remain responsible for the actions of their tenants.