One owner sees an income stream. The neighbour sees their home. Both can be reasonable.
Cape Town’s draft Short-Term Letting By-law has brought this tension back into focus. The conversation can quickly become “Ban short-term letting” versus “It is my property, so you cannot stop me.”
Before choosing a side, there is a better question:
What problem are we actually trying to solve?
The City is mainly dealing with registration, booking-platform data and municipal rates. A Body Corporate or HOA must deal with its own rules and the effect on people and shared property. Confusing those systems can lead to bad decisions.
What is Cape Town actually proposing?
An important distinction comes first: the 50% rates test is already contained in the City’s approved 2026/27 Rates Policy. The draft By-law proposes the registration and data-sharing system the City would use to identify short-term letting properties and apply that policy more consistently.
The City’s public summary says all properties listed for short-term letting on a booking platform would have to be registered. The draft’s registration clause, however, uses broader wording and requires owners or operators to register every property used or intended for short-term letting.
A City-issued registration number would have to appear on every platform listing. Platforms could not display an unregistered property or a listing without a valid number, and non-compliance could lead to formal enforcement. Owners, operators and platforms would provide registration information, while availability and occupancy data would help the City determine property use.
Although often described as Cape Town’s proposed “Airbnb rules”, the draft applies to booking platforms generally, not one company. It remains a proposal, and the grace period for registration and start date for data sharing have not yet been fixed. Public comment closes on 5 October 2026. City public-comment page and Draft Short-Term Letting By-law
What the 50% threshold really means
The 50% figure is a rates-classification test. It is not an annual cap on short-term letting. Crossing it does not by itself make the activity unlawful, and it does not change the property’s zoning.
The City calculates annual room-night capacity by multiplying the number of bedrooms by 365, then compares it with the room-nights listed as available. A one-bedroom apartment has 365 annual room-nights. If it is available for more than half of them, it exceeds the threshold even if many nights are never booked.
The 50% threshold does not automatically keep a property in the residential category. If a property is not used as a primary residence and is used for commercial short-term letting, the City treats it as commercial accommodation. For a genuine primary residence, availability above 50% places it in the commercial category. At 50% or less, it may remain residential if the other Rates Policy requirements are met.
Sectional-title units will be assessed individually. The City says it will consider activity over a rolling 365-day period, with changes to rates categories intended from 1 July 2027. Short-Term Letting FAQs and Rates Policy 2026/27
City registration does not decide what happens inside a scheme
Municipal compliance and scheme governance operate alongside each other:
| Layer | The main question |
|---|---|
| City of Cape Town | Must the property be registered, what data must be provided, and which rates category applies? |
| Body Corporate or HOA | What do the scheme’s approved rules allow, what problems are occurring, and what response can the scheme lawfully apply? |
The City’s FAQ says the proposed framework does not regulate the internal rules of Body Corporates and HOAs. That does not give every scheme unlimited power to prohibit the activity. City registration would not override valid scheme rules, while permission within a scheme would not remove an owner’s City requirements.
The scheme does not decide an owner’s municipal rates category. Its role is to enforce its own rules and manage the effect of letting on residents and shared property.
For a sectional-title Body Corporate, the Sectional Titles Schemes Management Act and the scheme’s approved rules are central. Prescribed rules already address nuisance, visitor behaviour, parking and interference with common property. Access-control measures, such as guest registration or time-limited credentials, may instead need to be addressed through the scheme’s approved rules or security procedures.
A dedicated short-term letting rule may therefore be unnecessary if the actual problems are already covered and the existing controls are consistently enforced.
If a conduct-rule change is needed, it generally requires a special resolution and Community Schemes Ombud Service approval. The rule must be reasonable and apply equally to owners. Whether a restriction meets those tests depends on its wording and the scheme. Sectional Titles Schemes Management Act and Sectional Titles Schemes Management Regulations and prescribed rules
For an HOA, the answer depends on its legal structure and governing documents. Its constitution, memorandum of incorporation, title conditions and rules will determine what may be regulated and how those rules may be changed. There is no single answer that applies to every HOA.
The same label can hide very different problems
Imagine two apartment schemes with short-term letting.
In the first, guests are registered, access expires automatically and complaints are rare. In the second, codes are shared, parking is misused and late-night noise is repeatedly recorded.
The label is the same. The management problem is not.
Boards should separate the issues:
- Noise and conduct: Is there repeated disturbance supported by dates and incident records?
- Security and access: Are guests identified, access rights controlled and codes cancelled after departure?
- Parking: Are guests using the wrong bays or blocking common areas?
- Turnover: Is frequent movement affecting residents, staff, lifts or security?
- Scale: Is the concern an occasional stay or a unit operating as full-time visitor accommodation?
Noise is not the same problem as access. Access is not the same problem as parking. Different problems may need different controls.
Insurance is separate from conduct. The board should ask its broker whether regular paying guests affect disclosure, liability, excesses or cover.
Boards should also distinguish a short-term letting problem from weak enforcement. Permanent residents, long-term tenants and other visitors can break the same rules. A fair process follows evidence and conduct.
Seven questions to ask before creating or changing a rule
Before taking a fixed position, trustees or HOA directors should ask:
- What problem are we actually experiencing? Describe the conduct or risk, not only the type of letting.
- What evidence shows that it is recurring? Review complaints, incidents, access records and dates.
- What do our current rules cover? They may already address noise, visitors, parking and common property.
- Are those rules being enforced consistently? A new rule will not correct a weak enforcement process.
- Would a narrower control work, and can we administer it consistently? Consider guest registration, time-limited access, parking controls, emergency contacts and who will manage them.
- How would it affect owners and residents? Consider safety and peaceful enjoyment, but also property use and legitimate income.
- Do we need specialist advice? Legal, insurance or security advice may be appropriate before a major change.
The purpose is to ensure that the response fits the problem and can be implemented fairly.
What should schemes do now?
While the draft is open for comment, boards should:
- Confirm how much short-term letting is taking place and how it currently operates.
- Review the latest approved rules together with objective complaint and incident records.
- Test guest identification, access, key-control and parking procedures, and check the insurance position.
- Read the City’s actual proposal and submit any comments before 5 October 2026.
Comments can be submitted through the City’s public-comment page.
Start with the problem, not the position
The debate does not have to begin with “Ban it” or “You cannot stop me.”
Some schemes may have serious, repeated problems that require firmer controls. Others may find that short-term letting causes little disruption, or that a targeted access, parking or conduct measure is enough.
Good governance is not choosing the toughest-sounding rule. It is matching a lawful, workable response to the problem the scheme can actually prove.
Start with the problem. Understand the rules. Then decide what response makes sense for the scheme.
If your scheme is reviewing short-term letting, PropAI can assess the existing rules, incident records and operating controls, then set out whether better enforcement, a targeted procedure or a rule change is the most appropriate next step.