A major shift coming for South African homeowners in complexes

A major shift could be on the horizon for sectional title property owners in South Africa as new regulations for short-term rentals move closer to implementation.

The Department of Tourism is finalising policies that could bring about significant relief and stability for sectional title schemes, particularly in cities like Cape Town, which have faced challenges due to the rise of short-term rentals.

Cities worldwide, including Amsterdam, Barcelona, Berlin, London, New York, Rome, San Francisco, and Vienna, have already imposed strict restrictions or outright bans on short-term letting.

South African cities may soon follow suit, a move that Andrew Schaefer, Managing Director of property management company Trafalgar, believes will significantly benefit sectional title property owners.

The primary goal of the proposed regulations is to integrate short-term rentals into the broader tourism sector.

Schaefer noted that this means properties listed on platforms such as Airbnb, Afristay, LekkeSlaap, and Booking.com may soon have to comply with the same registration and health and safety requirements as hotels, guesthouses, youth hostels, and backpacker lodges.

One of the big changes being discussed is limiting the number of days per year a property can be rented out.

Other cities have done this to make short-term rentals less attractive to investors and encourage property owners to rent their homes for longer periods.

In Cape Town, some people believe that too many short-term rentals have made it harder for locals to find affordable places to live.

Schaefer said the new regulations could provide much-needed relief for trustees and directors of sectional title schemes.

Many community housing schemes have struggled to impose restrictions on short-term letting due to opposition from owners who rely on this rental model for income.

In cities like Cape Town, Durban, and Johannesburg, some complexes have been transformed into revolving doors of short-term tenants, leading to security concerns, increased wear and tear on communal areas, and frequent violations of conduct rules.

Despite these challenges, enforcing restrictions has proven difficult.

Currently, the Sectional Titles Schemes Management Act (STSMA) allows conduct rules to be amended via a special resolution, but securing the necessary votes has been a challenge—particularly in complexes where a significant number of owners benefit financially from short-term letting.

Schaefer noted that, because of this, many trustees have been unable to stop the problems caused by short-term tenants.

However, the proposed regulations may shift the balance in favour of sectional title owners who seek stability and long-term value for their properties.

If short-term rental investments become less viable due to increased regulation, many owners may opt to sell their properties or convert them into long-term rentals.

This shift could lead to a stronger commitment from owners to uphold security measures and conduct rules, enhancing the overall quality of living in sectional title communities.

If the new regulations come into effect, South Africa’s property sector could see a marked transformation, with a shift away from short-term letting towards more stable and sustainable housing options.