Cape Town’s Draft Short-Term Letting By-law: What Body Corporates and HOAs Should Actually Be Asking

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 confirmed, and what is still proposed?

The 50% rates test is already contained in the approved 2026/27 Rates Policy. The separate registration proposal would help the City identify short-term letting properties and apply the correct rates category. A proposal about gathering information is not the same as a new rates policy. Approved Rates Policy

The City’s published FAQ describes a registration system for properties listed on online booking platforms. Listings would display a City-issued registration number, and platforms would share availability and occupancy information. These are the proposed arrangements described in that FAQ. City short-term letting FAQs

For this update, we checked the City’s published policy, FAQ, by-law directory and current notices. We could not verify a final adopted Short-Term Letting By-law or a commencement notice in those sources. Before acting on a new registration requirement, confirm the final wording, start date and any grace period with the City. City policies and by-laws

Although often described as Cape Town’s “Airbnb rules”, the proposal concerns booking platforms generally. Trustees should keep municipal registration and rates questions separate from the rules and daily management of their own scheme.

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.

The City’s FAQ says sectional-title units are assessed individually and describes a rolling 365-day assessment. It foresees rating-category updates under the new system from 1 July 2027. That is the timing described in the FAQ, not a confirmed start date for every proposed registration requirement. City short-term letting FAQs

The City also says existing commercial short-term letting businesses should already be paying the correct commercial rates. The July 2027 timing is not a blanket permission to wait. An owner who is unsure about their current category should check it with the City. City explanation of existing rates obligations

City registration does not decide what happens inside a scheme

Municipal compliance and scheme governance operate alongside each other:

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:

1. What problem are we actually experiencing? Describe the conduct or risk, not only the type of letting.
2. What evidence shows that it is recurring? Review complaints, incidents, access records and dates.
3. What do our current rules cover? They may already address noise, visitors, parking and common property.
4. Are those rules being enforced consistently? A new rule will not correct a weak enforcement process.
5. 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.
6. How would it affect owners and residents? Consider safety and peaceful enjoyment, but also property use and legitimate income.
7. 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?

Boards can improve the way short-term letting is managed now:

• 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.
• Ask owners to check their municipal rates position with the City rather than assuming scheme permission settles it.
• Check for a final by-law, confirmed start date or any further consultation before introducing procedures based on the registration proposal.

Use the City’s current notices and policies and by-laws directory for any further official updates. The earlier invitation to comment should not be treated as an open consultation.

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 short-term letting is causing difficulties in your scheme, PropAI can help trustees bring the rules, incident records and operating procedures together, coordinate specialist advice where needed, and follow through on the agreed actions.