Check these 6 short-term letting risks first before buying into a sectional title estate

BUYING AN APARTMENT? CHECK THESE 6 SHORT-TERM LETTING RISKS FIRST

By Jonathan Kohler, CEO and Founder of Landsdowne Properties

Apartment buyers can inherit a costly problem when a body corporate has weak control over unregulated short-term letting.

Location, levies, parking and unit condition matter.

Control of short-term letting now belongs on the same checklist, because poor access records, weak rules and rising arrears can turn a strong purchase into a financial risk.

The Key Issue Is Visibility

Regulated short-term letting through recognised platforms creates a record: a listing, booking trail, host profile, payment path and guest history.

Those records give trustees, municipalities and authorities a starting point when they need to understand how a unit is being used.

Unregulated short-term letting creates the real exposure.

It can happen through WhatsApp referrals, social media, informal agents, repeat guests and direct payments.

The body corporate may have no reliable record of who enters the building, how often a unit is occupied, or whether access devices are being passed around.

Cape Town's move to tighten compliance around commercial short-term letting gives the issue urgency.

The City has indicated that properties used for commercial short-term letting can attract commercial property rates, with future enforcement expected to use data from online letting platforms.

The visible market is already significant.

The Outlier reported that Cape Town had 26,877 Airbnb listings by September 2025, after adding more than 6,000 listings in two years, and that 40% of listings were controlled by only 7.8% of hosts managing four or more properties.

The Guardian, citing Inside Airbnb, reported that 82.6% of Cape Town listings were entire homes.

For trustees and owners, those figures raise the practical question: if the visible platform market is already this large, how much private short-term letting is happening outside any formal record?

Check Whether Short-Term Letting Is Allowed

Before buying into a sectional title scheme, ask for the conduct rules and confirm whether short-term letting is prohibited, permitted or conditionally allowed.

In the Paddock matter, the High Court confirmed that a body corporate can restrict short-term rentals through valid and reasonable conduct rules.

A building with clear rules, proper access records and consistent enforcement gives buyers more certainty.

Check How Guests Enter The Building

Access control is one of the first pressure points in unregulated short-term letting.

Buyers should ask how guests are registered, how access tags and remotes are issued, how parking is controlled, and whether conduct rules are provided to short-stay occupants.

Every guest uses shared infrastructure.

Guests pass through security, use amenities, occupy parking bays and place pressure on common property.

Check The Levy Arrears Position

A sectional title building runs on levies.

Those levies pay for security, insurance, cleaning, access control, lift servicing, maintenance, municipal recoveries, administration and reserves.

Frequent short-term letting places additional pressure on those shared systems.

In schemes with existing arrears, paying owners may fund the shortfall through deferred maintenance, weaker reserves, slower supplier payments or special levies.

The monthly levy is the visible cost.

The hidden cost appears later through urgent repairs, service interruptions, special levies and lower property value.

Check For Unmanaged Private Letting

Buyers should look for practical warning signs: frequent unknown visitors, unmanaged remotes, recurring noise complaints, parking disputes, security incidents, repeated access-control problems and trustees who cannot say how many short-term letting units operate in the building.

Check For Body Corporate Capture

A serious risk emerges when owners earning from unregulated short-term letting begin influencing how the scheme is run.

In a weak scheme, operators can become active in meetings, organise proxies, challenge trustees, resist access controls, question the managing agent and frame enforcement as poor management.

Once collection discipline slips, service providers wait longer for payment, maintenance slows, common areas deteriorate and property values come under pressure.

Check The Records Before Signing

Buyers should ask for the latest financial statements, levy arrears position, reserve fund balance, AGM minutes, special levy history, trustee turnover record, managing-agent history and any written short-term letting policy.

The Warning For Buyers

A well-located apartment can become a poor investment when the body corporate has weak records, weak rules and weak enforcement.

Recognised platforms create visibility.

Proper rules create control.

Consistent enforcement protects the levy base.

Unregulated short-term letting removes visibility from a shared-cost building.

The consequences appear in higher running costs, levy pressure, deferred maintenance, security strain, special levies and lower resale value.