Short and sweet
SA is in the process of regulating the short-term rental sector of the hospitality industry in response to cries from so-called regulated hotels and B&Bs to ‘level the playing field’
ecently Tshifhiwa Tshivhengwa, CEO of the Federated Hospitality Association of SA, said that Airbnb had created “unfair competition”, because informal accommodation providers “were not abiding by any laws or regulations”.
In response to similar views from other key sources, the government published the Tourism Amendment Bill, which stipulates that short-term home rentals will fall under the Tourism Act. Bottom line, the Department of Tourism has bowed to pressure from the regulated hospitality industry to control Airbnb, and the minister will lay down thresholds for Airbnb in SA – it may include limits on the number of nights guests can stay, maximum annual income allowable before an Airbnb establishment had to convert to a business, whether it was compulsory to be in the house during rentals, minimum security features or determining zones where Airbnb rentals are allowed.
Another issue that concerns local government is how to differentiate between residential municipal property rates and business rates. Sars, too, would have to comment on the tax implications of the bill with regard to additional private income earned from Airbnb.
This highly successful sector is seen as a disruptor, much like Uber, and there is strong debate about why it should be regulated to appease businesses that are taking strain because of Airbnb.
The impressive income figures from Airbnb – money generated directly, the spin-off in added tourism and the related employment figures plus the fact that these are small businesses (precisely what SA needs) – mean that regulations are not welcomed by the sector.
RLEGAL STANDPOINT
Airbnb.com’s terms of service include a provision that requires hosts to warrant that a listing they post for or a guest’s stay at an accommodation “will comply with all applicable laws (such as zoning laws), tax requirements and other rules and regulations (including having all required permits, licences and registrations); and will not breach any agreements you have entered into with any third parties, such as a homeowners’ association or condominium or other agreements”.
MUNICIPAL BYLAWS
There is no law prohibiting short-term rentals in general, but each municipality has the power to create and enforce bylaws and zoning regulations around shortterm rentals. Cape Town, for example, has developed its own set. Property owners need to check whether local bylaws exist around shortterm rentals and, if so, how to comply.
The question is, what constitutes a business? As more and more one- or two-person concerns cut costs by working from home, it’s a blurry line that is largely ignored. Subscribing to online platforms such as Airbnb is becoming popular, as South Africans feel the pinch and want to supplement their funds.
LETTING IN COMPLEXES AND ESTATES
If you rent a property, check whether your lease allows subletting. If you don’t and you’re discovered to have transgressed, you and your subtenant can be evicted.
Most sectional title body corporates and homeowners’ associations have rules about rentals, according to Maria Davey of Meumann White Attorneys.
“Familiarise yourself with the rules of the scheme or the constitution of the association, as many prohibit short-term rentals and require the trustees or directors to consent to leases,” Davey says. “Neither the Sectional Titles Act nor the Sectional Titles Schemes Management
Act address short-term letting and it is, therefore, permitted, but they do allow the trustees – as resolved by the members of the body corporate – to make or amend conduct rules, which could include a restriction or prohibition on short-term renting or the listing of units on a platform such as Airbnb if such a prohibition is not already in place.
“It’s imperative that you, the owner, include a copy of the conduct rules along with any other document the tenant is required to sign. You will after all be liable to the body corporate or homeowners’ association for your tenant’s misdemeanours. Similarly, a tenant who sublets is liable to the owner, so it’s imperative that the tenant makes all rules applicable to his subtenant.”
“Include a copy of the conduct rules along with any other document the tenant is required to sign” Maria Davey, Meumann White Attorneys