Ensure a successful holiday-letting experience
Category Newsletter: Article
When it comes to generating additional income, an increasing number of people are choosing to buy property as an investment.
In addition, the increased cost of living has led to only a few people settling for one stream of income, instead they are choosing to diversify their earnings by letting-out their properties to keen holiday-makers.
However, the majority of bodies corporate are still very cautious, and for good reason, as to how they approach this, with concerns over security and noise problems that could arise out of the lack of control as to who enters and exits the building.
Nevertheless, with the growing number of people purchasing sectional title units exclusively for short-term rentals, many bodies corporate are now considering allowing this.
Recommendations
Renting within a sectional title property is accompanied with its own rules and regulations that need to be agreed upon by a body corporate. For homeowners who are considering holiday-letting their home, taking heed of the following recommendations will assist in making the venture run smoothly and successfully.
1. Ensure that the tenant has a copy of the sectional title’s conduct rules, as this serves as a reminder of what is permitted and prohibited within the unit and its surroundings.
2. In addition, you should request that your tenant pay a security deposit as assurance in the event of damage to the property due to negligence or vandalism. The security deposit will be used to pay for this, however if no such damages takes place, the money is required to be paid back to the tenant a week after the lease ends.
3. If a tenant hurts him or herself whilst on a homeowner’s property, you as the owner could be held responsible for the injury if it occurred as a result of lack of sufficient maintenance to the property. Therefore, it is important to take out a public liability insurance that covers owners who are found to be legally liable to pay their tenant. It covers accidental death, injury and illness.
4. Ensure that your insurance and legal requirements are in place. Consult your property managers to make sure you receive the correct advice.
Why bodies corporate should permit letting
The income generated from holiday-letting, generates a substantial source of income for homeowners.
Residential Lease Agreement
Governing the lettings sector in South Africa is The Rental Housing Act, 1999 (Act. No.50 of 1999) that clearly states the rights and responsibilities of landlords (homeowners) and tenants. It recommends the need for a lease agreement, enforced by a landlord, and protects both parties from the risks associated with renting.
A lease agreement does not need to be in writing, but it is always recommended to do so. If a homeowner chooses not to implement a lease agreement, it is interpreted as an acknowledgement that damage did not occur during a tenant’s stay.
Coastal Property Group brings to the market an ideal home to holiday-let in an exquisite apartment in Green Point.
Author: Coastal Property Group
