When deciding whether to become an Airbnb host, it's important for you to understand how the laws work in your city.

According to Brett Herron, the mayoral committee member for transport and urban development at the City of Cape Town, different holiday accommodation land use types, such as B&Bs and guest houses, are regulated by the City’s zoning scheme, called the Development Management Scheme.

If referring to Cape Town, for instance, the city has a Guest Accommodation Policy that sets out the guidelines that have to be considered when applications are made to obtain the necessary planning permissions. According to the Policy, if you wanted to provide a self-catering, flexible accommodation option in line with current trends for transient guests, visitors and tourists, then these are the guidelines that should be followed:

Purpose

• A building or group of buildings consisting of separate accommodation units rented for residential purposes, each incorporating a kitchenette / full kitchen, but may also include an option of meals being provided communally to guests. • May include communal areas for the exclusive use by lodgers / transient guests.

Scale

• Form and scale of development determined by development parameters of particular zone (i.e. floor space, building lines, height) and the site context.• No general restriction on number of units, but must be locally appropriate in context of the building/site characteristics and surrounding area.• Council may determine / restrict the number of units per development in cases and lay down conditions necessary to mitigate the impact thereof.

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An energetic, dynamic unitof legal experts.

CAN MY PROPERTY BE USED FOR AIRBNB?

Issue 24

Location

• Not supported on a single residential zoned property, subject site must have suitable general residential, mixed use or commercial zoning.• Locational criteria that should be considered, include:

• proximity to public transport routes, commercial centres and tourist activities.• character of the surrounding area;• mixed use or commercial locations (including areas designated for high density development) are encouraged.

Conclusion

In many cities, you must register, get a permit, or obtain a licence before you can list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local municipalities may also vary greatly in how they enforce these laws. However, it is not impossible to list your property on Airbnb, you just have to find out from the local municipality if you have the correct permissions and if the property has the correct zoning.

References:

• Guest Accommodation Policy, the City of Cape Town, Department of Planning & Building Development Management.• “Regulating Airbnb in Cape Town”, Jan Vermeulen, MyBroadband. https://mybroadband.co.za/news/government/210884-regulating-airbnb-in-cape-town.html

DAMAGE TO PROPERTY

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What happens when your property has been purposefully damaged, especially during an altercation?

Uber car torching

During the road closures by meter taxis in Johannesburg on October 27 2017, two Uber drivers’ cars were set alight. A total of thirty meter taxi drivers were arrested for traffic disruption on the R21 and R24 highways of Johannesburg, and further investigations were underway as to determine how the cars were torched during the protest. With the meter taxi drivers being responsible for the flames, and assaulting an Uber passenger before leaving with her belongings. There have been ongoing violent feuds between Uber, meter taxis and taxi drivers, and in one instance, an Uber passenger was stabbed in the face, allegedly by a taxi driver. Two cars, believed to be Uber vehicles, were petrol-bombed earlier in September.

Malicious damage to property

Damaging property belonging to someone else is common – someone’s car door could fling to bump yours, the neighbour’s son may swing a cricket ball towards your kitchen window. These are mistakes which don’t normally require the assistance of authorities. Malicious damage to property is the

intentional and unlawful vandalization of property or belongings of another person. As a criminal offence in South Africa, damage to property extends over to the physical harm of pets, and the vandalization of cars, furniture and other tangible items which can cause financial setbacks.

Suing for malicious damage for property follows reporting the incident as soon as possible. It is advised to keep records, such as photographs, names of witnesses, time of incident, and most importantly, financial records of repairing or replacing said property or belongings. It is important to note that in cases where property is damaged in an act of self-defence, or protecting property, the claim for malicious damage to property will not be a successful one.

References:

• Criminal Procedure Act 51 of 1977. (1977). [ebook] p.194. Available at: http://www.justice.gov.za/legislation/acts/1977-051.pdf [Accessed 31 Oct. 2017].

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One of the biggest dreams that most people have, is to one day own their own home. However, that is easier said than done. Dreams of owning big houses with backyards turned into renting small apartments. The choice between renting a property and buying a property is often a difficult decision to make. Renting a property comes with its advantages and disadvantages, but so does owning a property.

The idea of renting a property is often frowned upon because most people believe that renting is just as good as throwing money in the bin. This is because the money goes straight to the landlord and the tenant is not getting much in return.

When faced with the decision of renting a property, keep in mind that there are both pros and cons.

The pros include:

1. More flexibility

Renting a home allows for more flexibility. Renting is ideal for those who move around often, whether it be for work or other reasons. If you don’t intend on staying in one specific place for a long time, renting is the perfect option for you, and it requires no long-term commitment from you as a tenant.

2. Affordability

You might not be able to buy a home in your favourite area; however, you could possibly afford to rent a home in your favourite area.

THE PROS AND CONS OF RENTING A PROPERTY

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The Sectional Titles Schemes Management Act, Act 8 of 2011 (the act) came into force on [date] and repealed and replaced the old prescribed management rules. In terms of section 10(2)(a) all schemes are to follow the new rules. One of the newest requirements in terms of the rules is that a Reserve Fund must be established, this fund must be paid for from contributions and held only for major capital items. I will explain both in further detail below.

The Reserve Fund and the Administrative FundTo start with, the administrative fund is an overarching fund, which is voted upon at the body corporate annual general meeting (AGM) and is for the day to day operating expenses necessary to manage the scheme. Such as, payment of rates and taxes, security and staff to mention a few. The levies paid by the tenants and / or owners are paid into the administrative fund and approved at the AGM. The Act established a reserve fund for major capital items and the rules define it as:

An amount set aside by the body corporate to meet unexpected costs that may arise in future, including future cost of maintenance.

The rules and Act state that the body corporate or trustees should set up and approve a maintenance plan for major capital items. Such plan must cover major capital item repairs in 10-year cycles. The items mentioned are expensive to repair and replace and require experts to not only quote on the repair and replacement but also perform the aforementioned repair or replacement. The definition of a Major Capital Item is:

3. No return on investment

When renting a property, there is absolutely no wealth creation or return on investment, as the home will never belong to the tenant. The tenant is basically just paying towards the homeowner’s home loan.

4. Rental fluctuations

You as a tenant, have no control over annual rental fluctuations, which are affected by inflation. If you can no longer afford to pay your rent, you will have to find an affordable home, and the homeowner will find a new tenant that can afford the increase in rent.

5. No guarantees

Once the lease is expired, there are no guarantees that the lease will be renewed, which means that the tenant will have to vacate the premises.

THE SECTIONAL TITLES SCHEMES MANAGEMENT ACT AND THE RESERVE FUND, NO GOOD DEED GOES UNPUNISHED.

Sources

• De Rebus, October 2018, Maintenance of Common Property in Sectional Schemes;• The Sectional Titles Schemes Management Act, Act 8 of 2011 and Regulations; and• Management Rules prescribed in terms of section 10(2)(a) of the Sectional Titles Schemes Management Act, 2011.

The Sectional Titles Schemes Management Act, Act 8 of 2011 (the act) came into force on [date] and repealed and replaced the old prescribed management rules. In terms of section 10(2)(a) all schemes are to follow the new rules. One of the newest requirements in terms of the rules is that a Reserve Fund must be established, this fund must be paid for from contributions and held only for major capital items. I will explain both in further detail below.

The Reserve Fund and the Administrative FundTo start with, the administrative fund is an overarching fund, which is voted upon at the body corporate annual general meeting (AGM) and is for the day to day operating expenses necessary to manage the scheme. Such as, payment of rates and taxes, security and staff to mention a few. The levies paid by the tenants and / or owners are paid into the administrative fund and approved at the AGM. The Act established a reserve fund for major capital items and the rules define it as:

An amount set aside by the body corporate to meet unexpected costs that may arise in future, including future cost of maintenance.

The rules and Act state that the body corporate or trustees should set up and approve a maintenance plan for major capital items. Such plan must cover major capital item repairs in 10-year cycles. The items mentioned are expensive to repair and replace and require experts to not only quote on the repair and replacement but also perform the aforementioned repair or replacement. The definition of a Major Capital Item is:

Sources

• De Rebus, October 2018, Maintenance of Common Property in Sectional Schemes;• The Sectional Titles Schemes Management Act, Act 8 of 2011 and Regulations; and• Management Rules prescribed in terms of section 10(2)(a) of the Sectional Titles Schemes Management Act, 2011.

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“means wiring, lighting and electrical systems, plumbing, drainage and storm- water systems, heating and cooling systems, any lifts, any carpeting and furnishings, roofing, interior and exterior painting and waterproofing, communication and service supply systems, parking facilities, roadways and paved areas, security systems and facilities and any other community and recreational facilities;”

The definition unfortunately does not include items such as doors and windows. Leaving the Trustees to decide what constitutes a Major Capital item. The Rules set forth that a maintenance plan should be approved and also that contributions to the reserve fund be retained to be used for the maintenance plan.

The contributions to the Reserve and Administrative Funds

Contributions to the administrative fund are the levies paid by the tenants and owners of units in a scheme, these levies are decided and voted upon at the AGM and are to cover the items operational expenses. Accurate records of all funds paid to the administrative fund must be kept and reported upon at the end of each financial year by the trustees to the members of the body corporate. The Reserve fund’s contributions are to be retained from a portion of the levies paid to the administrative fund as per rule 24. Rule 24 states that any part of the levies designated as being for the purpose of the reserves or the maintenance, repair and replacement plan, any amounts received from an insurance policy for damage to the common property, any interest earned on funds invested in the reserve fund and any other amounts determined by the body corporate. Otherwise all other funds are to be paid directly to the administrative fund. The amount to be retained in the reserve fund should be 25% of the annual contribution to the administrative fund per regulation 2(a) of the Act. Contributions and the calculation thereof will be dealt with in a later article.

The problem with the reserve fund

The fact that the reserve fund is derived for from a portion of the levies, means that the levies may need to increase to cover the portion to be retained. This has to be approved by the body corporate and if the levies increase to a point that the majority feels is too high then it is unlikely that the body corporate will approve. Meaning that the scheme and body corporate will fall foul of the law in this regard. Further in Wimbledon lodge (Pty) Ltd v Gore No and others [2003] 2 all sa 179 (SCA) it was stated that the body corporate is not an island unto itself, it is made up of all the members, so they share in the good and the bad equally. Thus the failure of the body corporate to set up a reserve fund can be detrimental to the entire scheme.

In the following article I will discuss the contribution calculation and the duties of the trustees.

Please contact us should you want to discuss the above further.Robert Andrew Louw

The Sectional Titles Schemes Management Act, Act 8 of 2011 (the act) came into force on [date] and repealed and replaced the old prescribed management rules. In terms of section 10(2)(a) all schemes are to follow the new rules. One of the newest requirements in terms of the rules is that a Reserve Fund must be established, this fund must be paid for from contributions and held only for major capital items. I will explain both in further detail below.

The Reserve Fund and the Administrative FundTo start with, the administrative fund is an overarching fund, which is voted upon at the body corporate annual general meeting (AGM) and is for the day to day operating expenses necessary to manage the scheme. Such as, payment of rates and taxes, security and staff to mention a few. The levies paid by the tenants and / or owners are paid into the administrative fund and approved at the AGM. The Act established a reserve fund for major capital items and the rules define it as:

An amount set aside by the body corporate to meet unexpected costs that may arise in future, including future cost of maintenance.

The rules and Act state that the body corporate or trustees should set up and approve a maintenance plan for major capital items. Such plan must cover major capital item repairs in 10-year cycles. The items mentioned are expensive to repair and replace and require experts to not only quote on the repair and replacement but also perform the aforementioned repair or replacement. The definition of a Major Capital Item is:

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Sources

• De Rebus, October 2018, Maintenance of Common Property in Sectional Schemes;• The Sectional Titles Schemes Management Act, Act 8 of 2011 and Regulations; and• Management Rules prescribed in terms of section 10(2)(a) of the Sectional Titles Schemes Management Act, 2011.

THIS NEWSLETTER IS COMPILED IN-HOUSE BY BYRON WHITE OF ESI ATTORNEYS.

Please contact ESI A�orneys at 021 943 5111 or Robert Louw at robert@esilaw.co.za should you have any further queries and/or would like to make sugges�ons for future property related ar�cles!