MAIN IMAGE: André van Rooyen, head of sales at PayProp
Kerry Dimmer
A somewhat different approach needs to be taken when renting a property within a sectional title estate. As explained by André van Rooyen, head of sales at PayProp, the very nature of this type of development requires that a body corporate be set up to act as its custodian. This creates a platform for the trustees—usually the owners—to pass rules and regulations. “This safeguards their interests by preserving the value of their investment and ensuring the comfort and safety of the occupants overall, including tenants.”
Crucial importance of rules and regulations
The Sectional Title Act governs how estates of this nature operate, and this includes most apartment blocks (which are “sectionalised”). In summary – a sectional title development will always have a body corporate – as defined by the Sectional Title Act. Freehold estates – which are not established as Sectional Title, and therefore not governed by the Sectional Title Act – sometimes have a Homeowner’s Association (HOA), which implements and enforces agreed rules for the freehold homeowners to abide by.
In these scenarios, rules are agreed upon and implemented by the trustees in the case of sectional title and the elected homeowners in an HOA. The onus to ensure that potential tenants are aware of the constraints falls somewhat onto the shoulders of the property practitioner appointed as a rental agent or the rental agency.
“It is becoming increasingly common for sectional title developments to require incoming tenants to acknowledge receipt of the rules,” confirms van Rooyen. “And if the owner is renting out themselves, that responsibility is theirs.
“However, given the compliance requirements involved in managing residential property, combined with the extra complexity of navigating sectional title rules, it makes far more sense to work with an experienced managing agent.”
Limiting rental agents/cies
This brings up the controversial question of whether the number of sectional title rental agents operating within an estate should be limited. Van Rooyen says that some BCs and HOAs are already doing this, “but on the other side of the coin are practitioners arguing that this is an unfair practice.”
This is tricky to navigate, especially when owners prefer one or another agent from whom they may have received great service. Another aspect is that having several rental agents operating in a large Sectional Title estate introduces more traffic at different hours. Some neighbouring unit residents complain that this is disruptive.
This also highlights that neighbours not tending to their units can create a negative perception for potential tenants, making the rental agent’s job that much harder. Owners of a rental unit affected by this are encouraged to ensure that the trustees are kept aware of any anomalies or infringements of the rules and regulations – particularly those around aesthetics and noise. Sadly, many owners aren’t even aware of the living standards surrounding their unit, and they rarely visit or do maintenance checks, which is yet another strong case for employing the services of a professional agent.
“Not just that, but also when rules and regulations change, the agent takes on the responsibility to inform tenants of these, relieving the owners of that burden.”
How can agents and agencies secure rentals easily in sectional titles?
Van Rooyen says that property owners in sectional title developments are looking for professional and compliant agents. “First – and we don’t spend enough time discussing this – the agent must hold a valid Fidelity Fund Certificate.”
“Secondly, the agent needs to be knowledgeable and understand that the trustees want their investment to be protected. Agents need to know the trustees and the estate’s rules and hear and address any concerns. Agents should also clarify to the trustees that they are on their side.
“Thirdly, ensure the tenants being placed also have the complex’s best interests at heart. By applying these principles, owners of rental units will keep on offering you the opportunity to place good tenants,” says van Rooyen. Overall, van Rooyen’s professional evaluation of sectional title complexes, HOAs, and BCs is: “We must always understand the purpose they fulfil. A dysfunctional or mismanaged BC or HOA will decrease the value of the assets they are trying to protect. Property Practitioners have to grasp this and find the balance between compliance and demand.”