Is short-term letting OK?

Question:
Is short-term letting of a unit (typically a week to two weeks at a time) permissible in a sectional title complex? We have no prohibition of this in our Conduct Rules, but the practice brings all sorts of problems in its wake.

Answer:
Neither the Sectional Titles Act 95 of 1986 ('the Act') nor the prescribed rules specifically restrict short-term letting of units in sectional title schemes. So if the prescribed rules apply to the scheme and there is no restriction against short-term letting contained in the title deed conditions applicable to the scheme, then you can be fairly confident that there is no restriction against short-term letting in your scheme.

However, the Act does specifically prohibit an owner from using his section or permitting his section to be used in such a manner or for such purpose as shall cause a nuisance to any occupier of a section.

From my experience, short-term letting in itself is not the real problem, but rather the behavior of the short-term tenants. These tenants are generally on holiday and people act differently on holiday to how they act at home. They have no vested interest in the scheme and often don’t consider the other occupiers in the scheme, because they will not be there for long enough to have to deal with the consequences of their actions.

If you are an owner opposed to short term letting and there is no relevant rule or title deed condition restricting short term lets in your scheme, you may consider chatting to fellow and like-minded owners and to the trustees to start the process of adopting a rule to restrict short-term letting in your scheme. Such a rule is considered to be a substantial detraction from an owner's ownership rights and therefore one must be able to show that the adoption of this rule is a reasonable reaction to a real nuisance.

The Act also requires that all rules must be reasonable and must apply equally to all owners of units put to substantially the same purpose. Therefore your rule needs to be carefully drafted so as to take these requirements into account.

Once the rule is drafted, preferably by an attorney, it must be adopted in accordance with the strict procedures laid down by the Act and it will only become enforceable once it is filed in the schemes file held at the relevant Deeds Registry.

Remember also that these rules may be challenged by an owner who has been engaged in the short-term letting business and therefore the rule and adoption procedures need to be squeaky clean if it is to stand up to the scrutiny of an arbitrator or a judge.

Article by: Jennifer Paddock - www.paddocks.co.za