South Africans renting their homes to students hit with legal fees of over R180,000

As property owners turn to student accommodation to generate extra income, they are increasingly facing fines, legal action and fees which can reach over R180,000, insurance risks and substantial financial losses.

A growing number of property owners are renting out their homes to capitalise on the critical shortage of student accommodation in South Africa.

However, Just Property CEO Paul Stevens warned that unless they’re legally compliant, they’re exposing themselves to fines, eviction halts, and financial losses.

South Africa is currently seeing a surge in “accidental landlords” trying to beat high interest rates and the cost of living by renting out privately owned space to students.

Unfortunately, Stevens said that without the correct legal framework in place, they’re walking into a minefield. “Many small landlords wrongly believe that they can fly under the radar,” he said.

“But the Stellenbosch Municipality v [Property Owner] ruling shows that the courts won’t hesitate to issue interdicts shutting down un-zoned communes.”

Adding to the difficulty, Stevens explained that the number of neighbours reporting suspected communes is also on the rise.

“The reality is that student digs have to comply with strict municipal bylaws, zoning laws, and national regulations, which are drastically different from the traditional buy-to-let playing field,” he said.

In student hubs like Johannesburg, Cape Town, and Stellenbosch, communes and boarding houses require specific consent use or rezoning permits from the local municipality, he noted.

“Municipalities are clamping down on un-zoned communes by issuing non-compliance notices to illegal operators as well as fines and the threat of legal action,” he said.

When landlords subdivide rooms or convert communal living areas into extra bedrooms, they frequently end up violating the local environmental health bylaws that govern maximum occupancy.

According to Stevens, this can lead to their building and public liability insurance policies being invalidated.

“If an emergency or a fire occurs in an un-zoned, overcrowded student commune, the landlord could face financial ruin as a result of the uninsured loss, and they could face criminal negligence charges, too,” he said.

Something else for landlords to consider is that they cannot charge more than the 2025 NSFAS annual baseline of R52,000 for non-catered university accommodation in metropolitan areas, Stevens said.

Further, in its University Guidelines for Off-Campus Private Student Housing Accreditation 2026, Stellenbosch University highlights that the NSFAS allowance excludes deposits and administration fees.

The lease mistakes that can leave landlords exposed

As per South Africa’s Rental Housing Act, Stevens explained that all student lease agreements must be in writing.

However, even when landlords put pen to paper, some make the mistake of signing a single lease with a group of students rather than one per person.

“Students, by their very nature, are unemployed, so landlords need to safeguard themselves by getting parents or guardians to sign as co-principal debtors and sureties,” Stevens said.

“Without surety clauses, landlords won’t have legal recourse to recover unpaid rent because the student probably won’t have a job or any assets that can be attached.”

The Supreme Court of Appeal precedent established in Stay At South Point Properties v Mqulwana has fundamentally changed the litigation landscape for student housing in South Africa.

However, Stevens expressed concerns. Lower courts no longer require institutional landlords to serve Prevention of Illegal Eviction (PIE) from and Unlawful Occupation of Land Act notices.

“Instead, they will grant eviction orders based on the common law rei vindication, which is an owner’s absolute right to reclaim their property from an unlawful occupier,” he said.

“When assessing new eviction cases, these courts will look for a finite academic term rather than a standard year-long lease.”

Stevens stressed that lower courts do not automatically extend this precedent to private residential leases.

“Chances are that if a student signs a 12-month private lease that’s not linked to a university timetable, the courts will regard that property as a home, which means the landlord has to go the PIE route,” he said.

The real cost of going to court

Stevens warned that the true cost of resolving tenant-landlord disputes in the High Court often catches property investors off guard. This is because of the gap between private legal fees and government tariffs.

Private legal fees for an unopposed High Court motion can range from R35,000 to R65,000, but when a student files a notice of intention to oppose, these costs can escalate to between R85,000 and over R180,000.

While many landlords believe that if they win their case, the tenant will have to pay all the legal bills, that’s not the way it works in real life. “South African law recognises two completely separate cost scales,” he explained.

First, there are the fees a landlord agrees to pay their lawyer, which drive the range to R35,000 to R180,000 or more.

Second, there are the statutory tariffs, which are regulated by the Rules Board for Courts of Law (Uniform Rules 67A, 69, and 70).

“Even if a court orders the losing tenant to pay the landlord’s costs, these will be calculated on the far lower, capped government scales,” he said.

As a result, Stevens said “successful” landlords often end up paying a large shortfall out of their own pockets.

To minimise legal and financial risk, he recommended incorporating two commonly acknowledged facts into lease agreements. The first is that most students look for accommodation between September and February.

Second, student accommodation is typically vacant between November and February, when exams end, and students return home for the holidays.

To help landlords protect themselves legally and financially, Stevens recommended inserting lease clauses like the following:

1. The agreement is an “Educational Accommodation Agreement”, not a standard residential lease, with the student’s right of occupation dependent upon their active enrolment at a specific college or university.
2. The lease will terminate 72 hours after the student writes their last exam or on the date their tertiary institution closes, whichever occurs first.
3. The student accepts that the accommodation provided does not in any way take the place of their primary domicile.
4. The landlord is legally entitled to regain full possession of their property after the academic term.

Stevens added that South Africa’s surge in student housing demand is not going away, nor is the regulatory scrutiny.

“For private landlords, the safest path is to treat student accommodation as a specialised asset class rather than an informal income stream,” he said.

“When the legal groundwork is done properly, student housing can be a stable, high‑demand investment. But without compliance, it becomes one of the riskiest corners of the rental market.”

“The difference between the two comes down to preparation, documentation and a clear understanding of the rules.”