What is Airbnb?
It is becoming increasingly popular, especially amongst younger property owners, to host their property on Airbnb. Airbnb, an online hosting website (www.airbnb.com), is a platform where residential property owners can list their apartments or houses, either as a whole or simply a room in their house, to travellers. Travellers can instantly book these properties if they meet all the requirements set by the host. It has become a popular and lucrative way for owners to rent out second properties or unused space in their actual home. Due to the safety measures enforced by the Airbnb platform which protects both the host and the guest, and the high income generated from such hosting, some property owners prefer this form of income above the traditional forms of renting out properties.
What is the issue?
In New York City, for instance, a bill was signed in terms of which short-term renting on platforms such as Airbnb is forbidden. Any violation of this law might result in a fine of $7500 (R96,496) to the property owner. The New York lawmakers claimed that Airbnb listings were impacting the amount of affordable housing available in the City. Property owners choosing to take their properties out of the rental market for full time residents results in extraordinary high housing costs. Airbnb has now contended the bill and no court ruling has yet been made.
New York City is not the only place where the short-term nature of Airbnb listings is problematic. San Francisco, Barcelona and Amsterdam are fighting similar battles.
What is the South African position on hosting your property on Airbnb?
If I am planning on listing my property on Airbnb, what should be my first steps to ensure that I comply with the relevant laws and rules?
In South Africa, there is no law prohibiting short-term rentals in general. However, each city is capable of creating and enforcing bylaws and zoning regulations to address the issue of short-term rentals. In the City of Cape Town, there are no bylaws specifically addressing these issues.
If your city does not specifically prohibit short-term rental, the next step will be to check the rules and Constitution of your Body Corporate or Home Owners Association, whichever might be applicable. Most of these bodies will 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 yet as popular in South Africa as it is in other parts of the world, the effect of Airbnb might not be as prominent nor might its effect have been investigated seriously by our local authorities, yet. Thus, until such a time as cities in South Africa enforced laws similar to those in New York City, Airbnb will continue to be a popular way to earn rental income for property owners.
HOWEVER take note that there might be other important questions you might need to get answers on before you make your property available on Airbnb, i.e.
Commercial Law: whether your short term insurance (i.e. house content insurance) will cover damages that may result from the actions of a ‘short term tenant’.
Commercial Law: at what point is the rental agreement concluded between you as the host and the tenant?
Commercial Law: what are your obligations as host in terms of the deposit paid by the tenant?
Commercial Law: will the tenant be allowed a cooling off period as per the Consumer Protection Act?