Making your property work for you – the do’s and don’ts of running a guesthouse

Opening a guesthouse can be a lucrative endeavour, but before taking the plunge and converting a residence into a financially rewarding business, there are important steps to be followed and considerations to be taken into account.

Buying Property On Auction | Property Blog Articles

When it comes to setting up a new guesthouse, careful prior planning should be seen as a non-negotiable. This will go a long way to ensuring all processes are followed correctly and avoiding any obstacles, unforeseen complications or penalties.

Application process

Once the basic structure of your guesthouse has been outlined, you will need to approach the local municipality to ensure that local planning regulations do not prohibit the establishment of a guesthouse in the relevant area. Municipal by-laws and regulations will have to be thoroughly researched to ensure that the proposed conversion of a residence into a guesthouse may proceed.

A detailed application must be submitted to the local municipality, including setting out the size and sustainability of the premises. While the process and application requirements are largely the same for all provinces, it is still advisable to approach the local municipality for details regarding requirements, necessary forms to be submitted and recommended supporting documents.

The Senior Property Managing Officer at the local council will deal with the application and motivational letter upon submission.

Objections

Following this, a timeframe is outlined during which objections to the application may be lodged. During this period, any affected parties can object with reason as to why the application should be denied by the municipality.

For example, a neighbour could object should they feel that the guesthouse does not conform to the rest of the neighborhood or if the correct licenses are not in place. The best strategy of avoiding objections being lodged by neighbours is engaging and negotiating with them from day one. While the courts can be approached if the parties concerned cannot reach an agreement, a legal battle can be a drawn-out, tedious and costly process and should only be considered as a last resort.

Rezoning

Further to this, a rezoning application will need to be submitted in order to change the primary use of land from residential to commercial, should the property not allow for a guesthouse to operate in its current form.

It is also very important to inspect the title deed of the property to ensure that there are no adverse conditions prohibiting the operation of a guesthouse on the property.

If the above is not followed correctly, there can be negative consequences for the business. 

In addition, the following points should be considered from the get-go to ensure that the basics are covered for your new guesthouse:

  • Choosing a business structure
  • Zoning
  • Licenses that are required
  • SARS and matters relating to the Receiver of Revenue
  • Insurance
  • Safety regulations
  • Employees and Labour relations

Follow Snymans on Facebook for more legal information, tips and news about property.

7419

Recommended for you

Minors and immovable property
Contractual Matters

What does the Coronavirus lockdown mean for your Offer to Purchase?

40140

We are experiencing unchartered territory with the current lockdown due to the Coronavirus and while it is impossible to predict what the future holds or have immediate answers to what this might mean for each property related scenario, we can offer some advice to those who have signed an Offer to Purchase prior to or during the lockdown in South Africa.

Read More
Your Trusted Partner in Residential and Commercial Property Transfers
Contractual Matters

Rectifying information on a title deed

39241

A title deed is the formal record of who the current owner is of a specific piece of land so naturally, making sure that this information is accurate and up to date is incredibly important.

Read More
Curatorship - what does it mean to be put under curatorship?
Contractual Matters

Documents required for transfer of property

48698

We know that paperwork isn’t everyone’s favourite thing, and while the property transfer process does require quite a few documents, it needn’t be overwhelming for buyers or sellers. That’s why we’ve put together this list of documents required for transfer of property.

Read More
My name has changed - what happens to my property’s title deed?
Contractual Matters

What should I know about bond registrations and cancellations?

47201

For the majority of property buyers, taking out a bond to help finance the purchase of their dream home is an essential step of the process. The good news for Snymans clients is that our experienced team can guide you through the process…

Read More
Minors and immovable property
Contractual Matters

Effective Cause – who earns estate agent commission?

53231

An estate agent can be an invaluable asset in helping you secure a quick and lucrative sale, but in cases where more than one agent might be marketing your property, how do you know who you owe commission to when a sale is concluded?

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Making your property work for you – the do’s and don’ts of running a guesthouse

Opening a guesthouse can be a lucrative endeavour, but before taking the plunge and converting a residence into a financially rewarding business, there are important steps to be followed and considerations to be taken into account.

Buying Property On Auction | Property Blog Articles

When it comes to setting up a new guesthouse, careful prior planning should be seen as a non-negotiable. This will go a long way to ensuring all processes are followed correctly and avoiding any obstacles, unforeseen complications or penalties.

Application process

Once the basic structure of your guesthouse has been outlined, you will need to approach the local municipality to ensure that local planning regulations do not prohibit the establishment of a guesthouse in the relevant area. Municipal by-laws and regulations will have to be thoroughly researched to ensure that the proposed conversion of a residence into a guesthouse may proceed.

A detailed application must be submitted to the local municipality, including setting out the size and sustainability of the premises. While the process and application requirements are largely the same for all provinces, it is still advisable to approach the local municipality for details regarding requirements, necessary forms to be submitted and recommended supporting documents.

The Senior Property Managing Officer at the local council will deal with the application and motivational letter upon submission.

Objections

Following this, a timeframe is outlined during which objections to the application may be lodged. During this period, any affected parties can object with reason as to why the application should be denied by the municipality.

For example, a neighbour could object should they feel that the guesthouse does not conform to the rest of the neighborhood or if the correct licenses are not in place. The best strategy of avoiding objections being lodged by neighbours is engaging and negotiating with them from day one. While the courts can be approached if the parties concerned cannot reach an agreement, a legal battle can be a drawn-out, tedious and costly process and should only be considered as a last resort.

Rezoning

Further to this, a rezoning application will need to be submitted in order to change the primary use of land from residential to commercial, should the property not allow for a guesthouse to operate in its current form.

It is also very important to inspect the title deed of the property to ensure that there are no adverse conditions prohibiting the operation of a guesthouse on the property.

If the above is not followed correctly, there can be negative consequences for the business. 

In addition, the following points should be considered from the get-go to ensure that the basics are covered for your new guesthouse:

  • Choosing a business structure
  • Zoning
  • Licenses that are required
  • SARS and matters relating to the Receiver of Revenue
  • Insurance
  • Safety regulations
  • Employees and Labour relations

Follow Snymans on Facebook for more legal information, tips and news about property.

7419