Changes to regulations at Pretoria 'beach estate' to be set aside

Balwin Properties has lost its case against unit owners of the Blyde Riverwalk Estate in Pretoria.

In a ground-breaking ruling the Community Schemes Ombud Service (CSOS) ruled that changes to the regulations at the estate were to be set aside.

Balwin set new regulations in September 2021 to restrict the number of day visitors by increasing fees to use the lagoon from R100 to R250 a person.

A month later they announced that short-term letting (STL), like Airbnb, would likely be phased out. 

This after a spat, Balwin alleged, between homeowners living permanently at the lagoon location, and those letting their homes for holidays.

At the time Balwin said the regulations were to prevent overcrowding.

In a statement to CSOS they said: “The Homeowners' Association had been forced to incur exorbitant expenses for security, lifeguards and for the maintenance and upkeep of the lagoon and other common areas in the scheme due to ongoing complaints about STL guests contravening the rules of the scheme.

“Among other things, these guests allegedly showed no respect for full-time residents, security staff and estate management, drank alcohol on common property, made excessive noise, and some of them dressed scantily in a family-friendly estate — in fact, on occasions, the STL guests had allegedly simply caused havoc within the estate.”

The homeowners' association, predominantly made up of Balwin members as the developers still own the majority of the estate, also decided to double the levies and add a R2,500 deposit for short-term lending guests.

The regulations also limited homeowners to guest numbers determined by the size of their apartment. One-bedroom was limited to one access code to the lagoon and two guests, two bedrooms to two access codes and four guests and so on.

The spat was due to many of the STL lessors having purchased properties on the assumption that they could be used as investments. TimesLIVE spoke to many lessors who claimed they purchased the properties only after Balwin employees suggested they could be used for investment or to pay off their bonds through STL.

In addition to the new regulations, Balwin announced that it was building its own hotel on the premises. This led to the belief by some that the new regulations were to cut out competition to the new and costly Mint Hotel.

Balwin has since announced that it will no longer be constructing the hotel.

On October 14, a meeting was held between STLs and the homeowners' association to vote on whether the STLs should continue. The STL's ultimately lost their vote and letting was to end on November 30. But STL's had already involved the CSOS.

On Tuesday the CSOS reported that schemes should tread carefully when dealing with the rights of owners and that the schemes did not have a right to impose rules and/or amend rules for owners without full participation of the owners and approval by the CSOS.

The ruling is as follows:

1. That the meeting held on October 14, at which a resolution to amend the rules that would see the withdrawal of rights of property owners to offer their properties for short-term letting, was not validly convened.
2. That the resolution passed at the said general meeting of October 14, to amend clause 21.4 is void; (Rule 21.4.2 states: ‘Short term letting of a unit will be subject to such terms and conditions and/or regulations as imposed by the Developer and/or Trustees from time to time should the Developer and/or Trustees elect to allow short-term letting’.)
3. That the scheme governance provision, Clause 21.4 of the Conduct Rules of 30 September 2020, having regard to the interests of all owners and occupiers in the Scheme, is unreasonable.
4. That the Association is ordered to approve and record a new Scheme governance provision to amend the current Clause 21.4.2 to be in line with the spirit and purport of the Sectional Titles Schemes Management Act and the constitution of the Homeowners Association.

CSOS adjudicator Khosi Mabaso advanced the following reasons:

1. The general meeting convened on October 14 shows that only 53% of the owners voted in favour of the new rule whereas the rules of the scheme required 75% of owners voting in favour of such a resolution. Consequently, the resolution could not stand.
2. The Respondents could not provide evidence that all the nuisance caused in the Scheme was attributable solely to short-term guests as there were indications that even permanent residents were, in certain instances, responsible for such unwanted behaviour. Mabaso, further stated that it was unfair of the Respondents to take a shortcut by clubbing the STL owners together instead of dealing directly with those owners who may have rendered themselves guilty of violation of the Scheme Rules.
3. The Developer and Trustees could not run the Scheme by imposing Rules on the owners, and in particular, Mabaso took issue with Rule 21.4.2.
4. Mabaso further referred to section 25 of the constitution in her Order and confirmed that each STL owner has a right to property, which cannot be interfered with arbitrarily. Such property rights come with the ability to generate income and wealth.

Mabaso stated: “The lessons to take away from this are simply that schemes should tread carefully when dealing with rights previously conferred on owners so that those rights are not arbitrarily withdrawn without full participation of the owners.  Furthermore, schemes do not have a right to impose rules and/or rules amendments on the owners without full participation of the owners as required and approval by the CSOS.

“The regulation of Schemes continues to be a matter of mutual engagement for parties resident within the schemes and each party ought to play its part, by avoiding nuisance to other users and, or owners and adhering to agreed protocols of the Scheme.”

The Pretoria estate has about 900 owner-occupied or long-term rented apartments and 200 short-term rental apartments. Another 2,000 units are being built.

TimesLIVE