Short-term rentals must meet requirements of the city and insurers

FACING tougher economic conditions and high debt burdens this year, many consumers are turning to short-term rentals such as Airbnb to supplement their income over the festive season.

This is being seen particularly among second-home owners.

While there is no doubt the rise of short-term rental online platforms can be considered one of the biggest disrupters in the rental space and a positive boost for the ailing economy, homeowners need to to be aware of the regulations and by-laws governing the rental sector, cautions Vera Nagtegaal, executive head of Hipp. co.za.

“Short-term rentals are a fantastic way for homeowners to earn a little more spending money.

“But, for any homeowner who is considering letting their home, it is important they are aware of the regulations, insurance implications and security risks involved.”

Realising the growth opportunity that comes with Airbnb, the City of Cape Town signed an agreement with the company in October to promote the benefits of people-topeople tourism for Cape Town residents and their communities, and to promote the city across the world as a unique travel destination.

According to Airbnb’s Overview of the Airbnb community in South Africa report, around R817 million was earned by local households in 2016, and more than R2.4 billion in total economic activity was generated between Airbnb hosts and guests spending time in the country.

In Cape Town alone, there are 17 600 active listings on the short-term rental website, and hosts have earned a combined income of R762m over the past 12 months.

However, letting one’s home affects a homeowner’s insurance cover, says Nagtegaal.

“Should the home be used for commercial purposes, an insurance claim could be repudiated if inadequate cover or the incorrect type of cover is in place.”

Nagtegaal

says

it

is extremely important that homeowners also understand the different types of cover available to protect themselves against theft, damage and any other possible claims.

As the home is technically being used for commercial gain, this has an impact on the type of cover the homeowner should have in place, which could also include public liability cover.

“As we gear up for the festive season, short-term rental hosts are encouraged to review and compare their existing cover against the various types of cover available.

“This is important to ensure they are adequately and appropriately covered against any eventuality,” Nagtegaal says.

PICTURE: PIXABAY Homeowners must make sure they are compliant before letting their properties.