Introduction
This festive time of year brings with it increased numbers of holiday makers. Investment owners in sectional title schemes located in holiday destination hotspots often let their units to short-term tenants. These owners make use of accommodation reservation websites such as Booking.com and Airbnb.com to let their units to holiday goers on a short-term basis.
Unfortunately short-term tenants can often be trouble-makers who breach the conduct rules. They often commit parking infringements and breach noise and nuisance regulations. This can jeopardise the reputation, security and property value of the sectional title scheme. In terms of section 2(5) of the STSM Act the trustees are tasked with the duty to control, manage, and administer the common property, and do all things reasonably necessary for the enforcement of the rules of the scheme.
Tenants are not members of the body corporate, but are members of the community residing in the scheme. The lease agreement establishes a contractual relationship between the owners of the unit (the “landlord”) and the tenant residing in the unit. Tenants need to adhere to the same rules that deal with occupation issues, for example the rules relating to the keeping of pets; parking vehicles on common property; and noise and nuisance provisions.
The trustees will enforce the rules against the owner of the unit on the basis of the owner being a member of the body corporate. The owner of the unit will then need to ensure the tenant’s compliance with the rules on the basis of their rental lease agreement (contractual relationship). It is therefore ultimately the owner who is responsible for the actions of their tenant.
Requirement to give the tenant a copy of the scheme’s rules
Section 5(8) read with section 5(9) of the Rental Housing Act 50 of 1999 requires that the landlord must ensure that a copy of any House Rules applicable to a dwelling must be attached as an annexure to the lease. The Rental housing Act defines “House Rules” to mean the rules in relation to the control, management, administration, use and enjoyment of the rental housing property. In the context of sectional titles this will include the management and conduct rules in terms of section 10 of the STSM Act.
In terms of section 10(6)(c) of the STSM Act the body corporate must deliver a copy of the rules to each person who becomes an owner or occupier. We therefore recommend that the reservation booking websites, landlord owner and body corporate ensure that any short-term tenant have access to a copy of the scheme rules. The rules could be left on a public notice board at the scheme, or the rules could be left within the section that is let.
Duty on owner to notify body corporate of changes of occupancy
Notwithstanding the fact that section 13(1)(f) of the STSM Act imposes an obligation on the owner of a unit to notify the body corporate forthwith of any change of ownership or occupancy in his or her section and of any mortgage, owners seldom give bodies corporate details of their tenants. Furthermore, few landlords attach a copy of the scheme’s conduct rules to the lease. The trustees and managing agents will therefore have to monitor the identity of the occupants in a scheme and ensure that they are given a copy of the scheme rules which they are obliged to abide by.
The rules of the scheme
Section 10(1) of the STSM Act states that a scheme must as from the date of the establishment of the body corporate be regulated and managed, subject to the provisions of the STSM Act, by means of rules. Section 1 of the STSM Act defines the rules to mean the management rules and conduct rules referred to in section 10(2)(a) and (b) of the STSM Act, respectively.
Regulation 6(1) made under the STSM Act states that rules, as prescribed and as amended by a body corporate in accordance with section 10 of the STSM Act, must be considered to be and interpreted as laws made by and for the body corporate of that scheme.
Section 10(4) of the STSM Act states that the management or conduct rules bind the body corporate and the owners of the sections and any person occupying a section. PMR 3(2) requires that a member must take all reasonable steps to ensure compliance with the conduct rules in force in terms of section 10(2)(b) of the Act by any tenant or other occupant of any section or exclusive use area, including the member’s employees, tenants, guests, visitors and family members. The imposition of a duty on owners to “ensure compliance” with the rules is interpreted as the imposition of a strict and “no-fault” liability which implies that the body corporate can fine and otherwise act against an owner on account of the actions of a tenant, the tenant’s family, guests, employees or invitees and anyone else who is allowed onto the scheme by anyone who can be linked to an occupier of the section. PCR 7(4) states that: “The owner or occupier of a section is obliged to comply with these conduct rules, notwithstanding any provision to the contrary contained in any lease or any other grant of rights of occupancy.” Therefore, it is the duty of an owner to ensure that his or her tenants and other occupiers, including employees, guests and their family members, comply with the rules.
Concluding Advice
The body corporate should identify the undesirable activities that result from the short-term letting, and establish whether this high-turnover occupancy process unreasonably interferes with the use and enjoyment of the common property or sections by other owners or occupiers, and whether the activity causes a nuisance. Schemes that allow short-term letting should adopt a conduct rule that addresses:
- The owner must keep proper and accurate records of the full identities, addresses and contact details of all tenants leasing their units.
- The owner must ensure that a copy of the scheme’s conduct rules is made available to each and every tenant that lets their units.
- The owner must ensure that each tenant sign an undertaking to comply with the scheme’s conduct rules.
- Rules that specifically address the actions and behaviour of the short-term tenants that result in nuisance.
- Rules that addresses access control and security.
- Penalty rules for consistent, persistent and serious nuisance caused.
Written by Dr Carryn Melissa Durham
