What You Need To Know When Opening & Running A Guesthouse In South Africa
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.
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.
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.
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.
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
- Licenses that are required
- SARS and matters relating to the Receiver of Revenue
- Safety regulations
- Employees and Labour relations
Author: Snymans Inc Attorneys