Is Hosting Your Property On AirBnB Legal?
Category Property Market
We’ve all read the reports on how AirBnB is ‘taking over the world’. How have its popularity and growth been here in South Africa? Time to start making extra rental income in that sectional title apartment of yours?
Not so fast as there might be certain laws (local by-law) and restrictions (Body Corporate) which prohibit such activities. Given this is all relatively new material, this article paves the way for many of us with similar questions.
What is it and is it worth it?
It is becoming increasingly popular amongst younger property owners to be listed on Airbnb. Airbnb is a reliable marketplace for people to advertise, discover and book unique accommodations globally using any device.
Residential property owners can list their apartments or houses or a room to travelers. Travelers can instantly book if they fulfill requirements pre-determined by the host.
It has become a profitable way for owners to rent out second properties or unused spaces in their homes. Due to the Airbnb safety measures, which protects both the host and the guest, some property owners prefer this form of income as opposed to the traditional forms of renting out properties.
What’s the issue?
A bill was passed stating that short-term renting in spaces like Airbnb is forbidden. Any violation of this law might result in a fine of $7,500 (R96,496) to the property owner.
The lawmakers claimed that Airbnb listings were affecting the affordability of available housing.
Property owners chose to retract their properties from the rental market for full-time residents which resulted in high housing costs. Airbnb has now contended the bill and no court ruling has been made since.
There are many cities that are against the short-term nature of Airbnb listings. San Francisco, Barcelona, and Amsterdam are but a few that are fighting similar battles.
Want to be Airbnb listed? – The laws and rules
In South Africa, there is no law prohibiting short-term rentals.
However, each city can create and enforce bylaws and zoning regulations to address short-term rental issues. The City of Cape Town has no laws addressing these issues.
If your city does not specifically prohibit short-term rentals, the next step will be to check the rules and constitution of your Body Corporate or Home Owners Association. Most associations have specific rules regarding rentals.
If the rules are not in your favour, you will have to discuss your prospective Airbnb listing with the trustees and/or managing agent to obtain their consent.
Lastly, the conditions in your Title Deed should be checked by your Conveyancer. It might be that conditions were imposed by the original developers or by the local City/Municipal Council that prevent you from leasing the property on a short-term basis.
Since Airbnb is not as popular in South Africa as it is in the rest of the world, the effect of Airbnb might not be as prominent or investigated seriously by our local authorities, yet. Thus, until such a time, Airbnb will continue to be a popular way to earn rental income.
NB: There are important questions you will need to ask before you make your property available on Airbnb:
- Does your short term insurance (i.e. house content insurance) cover damages that may result from the actions of a ‘short term tenant’?
- At what point is the rental agreement concluded between you as the host and the tenant?
- What are your obligations as host in terms of the deposit paid by the tenant?
- Will the tenant be allowed a cooling off period as per the Consumer Protection Act?