Short-term letting can be a great source of income. But it comes with risks as well. Some guests will overstay their welcome. Some will damage property. How can one protect oneself against these types of guests?
PREVENTION IS BETTER THAN CURE At the outset it must be said that the best way to prevent guests from refusing to leave at the end of their stay is to refuse to allow those guests to stay in the first place. This is easier said than done. But three things can be done to sift potentially problematic guests. In the first-place large deposits will help in disincentivizing chancers from moving in. Secondly it is important to make sure that comprehensive information is collected from each guest; people who have something to hide or some covert intention may be less inclined to share their personal information. And thirdly all information must be vetted. This may include running a credit check, and verifying proofs of address etc. In short, prevention is better than cure.
WHEN GUESTS WON’T MOVE OUT If prevention has not worked, and guests overstay their welcome, then they will have to be evicted by way of a court order. Evictions can take notoriously long to finalise. This is because of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) and the change it has brought to evictions of unlawful occupiers. But the situation, thankfully, is different for short term rentals.
In the normal course of commercial evictions PIE does not find application. The reason why short-term rentals are on a different footing from regular letting, is that guests of short-term rental properties have somewhere else to stay. Brand JA wrote in Barnett and Others v Minister of Land Affairs and Others 2007 (6) SA 313 (SCA) that “I believe it can be accepted with confidence that PIE only applies to the eviction of persons from their homes”. And Weinkove AJ dismissed an application for leave to appeal in the unreported case of Yussuf and Another v Ye Khan Investments CC and Another (1355/2011) [2011] ZAWCHC 416 (1 November 2011) on the basis that:
“The Act was passed to provide some protection to squatters and other persons who were occupying land or premises unlawfully and without any leases because they were desperate and had no other form of shelter or home. I am unpersuaded that a guest house qualifies for protection in terms of the Pie Act because occupants in a guest house are occupying the premises for a fixed period of time with the express consent of the owner or the person in charge of the premises. This is a commercial property, like a hotel, which provides for short term occupation of persons who are visitors and not to persons who are long term occupiers of land or property because they have nowhere else to live.”
Because of this distinction, an ejectment application can be brought in court, normally on relatively short notice. The fact that PIE would not apply to such an application would mean that it could be finalised much more quickly than if a tenant was being evicted from an ordinary leased premises.
To ensure that there is no dispute about the nature of a guest’s stay in a short-term rental, or the consequences of the eviction, it could be useful, therefore, to have a clause somewhere in the agreement signed by guests that they confirm they have a place of residence elsewhere and that they are renting the Airbnb for recreational, and not residential purposes.
And also, act swiftly. Appoint attorneys who know what they are doing and don’t dally; if a guest has already overstayed, there is no reason to believe any promises they make. As soon as it becomes apparent that the guests are trouble-makers steps should be taken. This will increase the prospects of obtaining the relief sought and in limiting the damages suffered.
GETTING GUESTS TO PAY UP There is a further aspect that can arise with short-term rental. That is damage to property. The preventative measures set out in the first portion of this article will be just as important for discouraging the type of people who may end up damaging property in a short-term rental as they are for sifting guests who will overstay.
If damage has occurred, it will be crucial that sufficient correct information has been collected from the guests. Otherwise trying to recover the cost of any damages will be a lost case. Once again, large deposits will assist in avoiding the nuisance of having to issue summons for the recovery of damages.
It will also be important to have clear and accurate ingoing and outgoing inspections for each set of guests. Furthermore, records should be kept of each item in the house and the replacement cost thereof, so that any damage can be promptly and easily quantified
About the author: Marlon Shevelew is the director of law firm Marlon Shevelew and Associates Inc. Shevelew is a well-known expert authority on residential property law in South Africa.