Advice and Opinion

Student accommodation: how landlords can protect themselves

Cape Town is achieving some of the highest rental returns in the country, according to TPN. The Mother City’s rental yields are at an annual escalation of 10%, whereas Johannesburg is only seeing an annual escalation of 3%.

“One of Cape Town’s biggest demands in the rental space is student accommodation,” says Natalie Muller, Regional Head of Rentals at Jawitz Properties in the Western Cape. “But a lot of landlords are cautious to rent out their properties to students and are thus missing out on the lucrative opportunity this market presents.”

Be it worry that students will wreak havoc at home or not be good for the monthly rent, there is a way for landlords to get past the fear and protect themselves.

“It is essential to bind the parents of the student to the student, so that all parties are liable for any defaults or destruction,” Muller says. “By doing this and signing the lease in both the parents’ and student’s names, landlords are automatically protected.”

Landlords can even request that certain clauses be added to the lease agreement – specifying no noise at certain hours, house rules and etiquette requirements. “And because the parents are bound, it is in their best interest to ensure their student child adheres to these rules.”

When it comes to making sure the rent is paid, the parents who may in fact be the ones paying rent anyway, are now certainly responsible for the rent to come in, as it is stated in writing. “They have co-signed the lease and are liable,” Muller adds.

While one can sign a contract at 18 years old constitutionally, it is unlikely that the majority of students have a sufficient credit rating, so the parents would be the ones who prove they qualify for a rental agreement or not. If it is a two parent-family, however, have credit checks done on both of them before they sign the lease. “Don’t assume that just because one parent is solvent that the other one is too. It’s important to check all parties to protect yourself,” Muller says.

When signing the lease, also be sure the wording binds the occupier (the student) with the leaseholder (the parents). “This will become important should you need to serve notice,” Muller concludes.