Short-Term Rentals In Residential Complexes

Die onderstaande administratiewe besligging is baie interessant omdat dit in die eerste plek meer sekerheid bied op die vraag, of eenhede in deeltitel en ander soortgelyke hoë digtheid-ontwikkelings, vir kort-termyn gewin uitgehuur kan word en tweedens gee dit ‘n aanduiding van tot welke mate die Kantoor vir Ombud Dienste vir Gemeenskap Skemas, wat ‘n paar jaar gelede deur wetgewing die lig gesien het, bereid is om geskille tussen die onderskeie belanghebbendes te besleg.

In residential complexes you will find owners who are against short-term rentals through platforms like Airbnb (for occupation by weekend and holiday guests) for a number of reasons. Some of these reasons are the fear that these type of rentals will decrease the value of their properties, damage the reputation of the development, and pose a security risk to the residents. Other property owners, however, see short-term rentals as an opportunity to earn an extra income and therefore often ignore and even challenge Body Corporate rules which place limitations on their right to do so. These provisions that prevent short-term rentals in Sectional Title Schemes often appear in the Body Corporate rules.

Recently, eighty-six owners at the Blyde Riverwalk Estate in Pretoria took on the trustees of the Blyde Homeowners Association, the developers, Lansdowne Property Group and Balwin Properties. The reason for the conflict was that the trustees and developers withdrew the owner’s right to let their units on Airbnb by changing the rules of the scheme. The majority of owners at the Blyde voted against the continuation of short-term letting and only rentals longer than three months would be allowed in the future. The said owners, who were unhappy with this decision, then referred the dispute to the Community Schemes Ombud Service (CSOS). The CSOS adjudicator found in favour of the eighty-six owners (the applicants) and the trustees and developers were forced to reverse their ruling which prohibits short-term letting at the Blyde.

The adjudicator found that:

• the Rules of the Scheme required that at a general meeting 75% of owners should vote in favour of a resolution to change the rules. Since only 53% of the Blyde owners voted in favour of the resolution there were insufficient votes to change the rules.
• each owner has a right to property that cannot be interfered with arbitrarily. Such property rights come with the ability to generate income and wealth. (Referring to Section 25 of the Constitution)

In the Blyde case the adjudicator was concerned that one of the rules gave the developers and trustees the power to run the development by imposing rules on the owners. It has  been said that the action by the developers to amend the very rule which they initially used to get people to buy the units in the scheme appeared to be unreasonable too.

The Blyde case differs from a 2019 High Court decision in the matter of the Body Corporate of the Paddock Sectional Title Scheme v Sally Nicholl. In this matter the Respondent operated her unit as an Airbnb, although the conduct rules prohibited it and required the lease of a unit to be for a minimum period of 6 months. The Respondent claimed that certain rules were unreasonable and unconstitutional in that it deprived her of her property as she could not let her property to who she wants and for as long as she deems fit. The new rules in question were, however, unanimously adopted by the Body Corporate by way of a special resolution and were registered with the CSOS. The Court found  that the amendment to the conduct rules was reasonable and that the rules needed to be respected and preserved. Limiting the length of the lease did not amount to a substantial interference of the use and enjoyment of the Respondent’s property and did not arbitrarily deprive her of her right to property.

Regards / Groete

Hennie, Eberhard & Cheryl-Anne