When do you feel one has attained the ability to teach martial arts?

First, I believe wholeheartedly that a Sensei must be at the level of San-dan or higher. Since attaining a higher level belt is not all the difficult and is dependent on individual dojo and/or organization criteria it is not always indicative of Sensei material.

Being a Sensei in a traditional/classic dojo also requires so much more which would include a certain level of maturity that I would attach both an age and a years of experience where the experience encompasses things like; dojo experience, real life experience and teaching experience (under the guidance of a qualified teacher/sensei.).

I would say one must have between ten and twenty years experience. If they also want to teach self-defense they must have personal experience in that area as well (not just one or two encounters of social school yard type but a professional level encounter such as combat in military or police or prison officers, etc.)

If one is strictly practicing sport oriented martial arts then the criteria is the same but the experience needs only be in the sport oriented arena. Regardless, all Sensei must have from ten to twenty years and be at the ripe old age of thirty to age forty - minimum.