Please note that you are using an outdated browser which is not compatible with some elements of the site. We strongly urge you to update to Edge for an optimal browsing experience.

Why community schemes need to have rental management policies

02 May 2017

If you are buying a property in an estate or a cluster home complex, you should ensure that the homeowners’ association (HOA) has a formal policy covering the letting of homes in the development as well as the obligations of those owners who decide to become landlords.

Kotzé says the HOAs of developments in coastal towns or other resort areas may also want to set a minimum rental period to discourage short-term or “holiday” letting that would almost certainly disturb long-term residents.

This is necessary to protect property values in such developments, says Gerhard Kotzé, MD of the RealNet estate agency group.

“Most tenants will be happy to comply with HOA rules and live in harmony with their neighbours, but there are always those that persistently break the rules - and count on it being difficult for the HOA to get their absentee landlords to take any action against them as long as they keep paying the rent,” says Kotzé.

In addition, he says non-resident owners have historically been less interested in the overall condition of the development, and less willing to invest any money in home maintenance and repairs.

“And if a lot of the homes are rented, this can quickly lead to the estate or complex as a whole looking neglected - and to home values being undermined as it becomes difficult to attract prospective buyers,” he says.

Kotzé says a formal rental policy, written into the HOA rules is the best and fairest way to prevent such a situation from developing.

The items written into such a policy should include:

- A requirement that owners who rent out their properties include the HOA rules (including the rental policy) in their lease agreements.

- A provision that any violation of the HOA rules will automatically constitute a breach of the lease agreement.

- A provision that the owner of the rented property will in such a case be required to take corrective action, including eviction of the tenant if appropriate. 

Kotzé says the HOAs of developments in coastal towns or other resort areas may also want to set a minimum rental period to discourage short-term or “holiday” letting that would almost certainly disturb long-term residents.

“In addition, the HOA should for security reasons insist that landlords supply it with the names of their tenants as well as their contact details, vehicle information, and copies of their lease agreements including the HOA rules,” he says.

Such a policy, Kotzé says, will go a long way towards preventing disputes that have to be taken to the new Ombud for Community Housing Schemes to resolve.

“Meanwhile, for their own protection, homeowners who plan to let their properties should also work with a reputable rental management agency that will check the creditworthiness and rental history of any prospective tenant before handing over the keys,” says Kotzé.
Print Print
Top Articles
The South African property market in 2024 has been anything but stagnant. With exciting shifts in buyer behaviour, rental trends, and investment opportunities, this year has been a whirlwind of activity and adaptation.

What sets the luxury market apart is its independence from broader economic trends and understanding what drives this market requires looking beyond the numbers to the intangibles that define true luxury.

With interest rates finally on the decline and rental vacancy rates lower than they’ve been in years, property is an excellent investment option as long as the homework is done

Loading