Circular 67 – The CSOS Decision on Short-term Letting at the Blyde Sectional Title Scheme, Pretoria
Dear Valued Managing Agent
The Chief Ombud, on Wednesday, 12 January 2022, released a highly anticipated decision as to whether Short-Term Letting (STL) by investment owners will be allowed to continue at The Blyde Crystal Lagoon Apartments in Pretoria.
The Applicants were owners of apartments that bought the units as an investment opportunity to lease out to guests over a short period of time similar to that of Airbnb. The Respondents included the Board of Trustees of the Blyde, Riverwalk Estate Homeowners Association, Landsdowne Property Group and Balwin Properties Ltd.
On 14 October 2021, a general meeting was held whereby a resolution was passed to amend the Conduct Rules which would essentially ban STL. The prohibition of STL led investment owners to lodge a complaint to the CSOS.
The Respondent’s reasoning for not allowing STL was that more resources were needed to accommodate STL guests as well as the fact that the STL guests were disruptive, failed to adhere to complex rules as well as their overall behaviour.
The Applicant’s contended that they would not have initially invested in the units had STL not been allowed. Furthermore, they stated that the general meeting that was held on 14 October was unlawfully conducted.
The Adjudicator found that the meeting was indeed not validly conducted and consequently the resolution to amend the Conduct Rules was void. This was a result of only 53% of owners voting in favour of the resolution and not the required 75% that is needed to pass such a resolution. Additionally, the Respondents could not prove that only STL guests were responsible for the unwanted behaviour because there were indications that permanent residents may have also contributed to the discontentment of the Respondents.
The decision reiterated Section 25 of the Constitution which states that every owner has the right to property, which cannot be interfered with arbitrarily and which comes with the ability to generate income and wealth.
From this long awaited decision we can see that Schemes need to be careful when revoking owner’s right that have already been bestowed upon them. Rights cannot be arbitrarily withdrawn without participation by the owners.
