- Landlords operating student accommodation without municipal approval risk fines, legal action and compliance orders.
- Poorly managed student housing can breach health and safety laws, invalidate insurance cover and expose owners to liability.
- High Court disputes involving student tenants can cost landlords between R35,000 and more than R180,000.
The growing shortage of student accommodation across South Africa has encouraged many property owners to convert spare rooms, family homes and investment properties into student housing.
While the market offers strong demand and the prospect of steady rental income, experts are warning that landlords who fail to comply with the law could find themselves facing significant financial and legal consequences.
Just Property CEO Paul Stevens says an increasing number of South Africans are becoming what he describes as accidental landlords as they look for ways to supplement their income amid high interest rates and rising living costs. However, many underestimate the legal obligations that come with operating student accommodation.
Stevens warned that student housing is not simply another form of residential letting. Instead, it is governed by a range of municipal bylaws, zoning requirements and national regulations that differ substantially from the traditional rental market.
Municipal approval is not optional
One of the biggest mistakes landlords make is assuming they can rent out rooms to students without obtaining the necessary permissions from local authorities.
Stevens pointed to a court ruling involving Stellenbosch Municipality that demonstrated municipalities are prepared to take legal action against property owners operating unapproved student communes. He said local authorities are increasingly issuing compliance notices, fines and legal threats against landlords who fail to comply with zoning requirements.
In major student centres such as Johannesburg, Cape Town and Stellenbosch, communes and boarding houses generally require specific consent use approvals or rezoning before they can lawfully operate.
Stevens said neighbour complaints about suspected communes are also increasing, resulting in greater scrutiny of properties being used for student accommodation.
“Many small landlords wrongly believe that they can fly under the radar,” he said. “But the Stellenbosch Municipality ruling shows that the courts will not hesitate to issue interdicts shutting down unzoned communes.”
Overcrowding can create serious liability
The pressure to maximise rental income has also resulted in some landlords converting lounges, dining rooms and other communal spaces into additional bedrooms.
Stevens warned that these alterations frequently place properties in breach of environmental health bylaws governing maximum occupancy levels.
The consequences can extend far beyond a municipal fine. “If an emergency or a fire occurs in an unzoned, 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.
Insurance companies may refuse to honour claims where a property is being used in a manner that does not comply with approved zoning or occupancy regulations. As a result, landlords could find themselves carrying the full financial burden of damage, injuries or loss arising from an incident on the property.
NSFAS limits affect rental income
Landlords hoping to maximise returns from student accommodation must also be aware of limits affecting students funded through the National Student Financial Aid Scheme.
Stevens noted that landlords cannot charge more than the annual NSFAS baseline allowance of R52,000 for non catered university accommodation in metropolitan areas during 2025.
He further pointed out that deposits and administration fees fall outside the NSFAS accommodation allowance, a position highlighted in Stellenbosch University's 2026 guidelines for off campus private student housing accreditation.
The restrictions mean landlords must carefully structure their pricing models and understand the financial realities facing student tenants.
Lease agreements need stronger protection
Stevens said many landlords expose themselves to avoidable losses by relying on poorly drafted lease agreements.
Although the Rental Housing Act requires residential leases to be in writing if requested by a tenant, Stevens believes all student accommodation agreements should be formal written contracts.
He warned that some landlords sign a single agreement with a group of students instead of concluding separate agreements with each occupant.
More importantly, he said landlords should require parents or guardians to sign as co principal debtors and sureties.
“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,” he said.
“Without surety clauses, landlords will not have legal recourse to recover unpaid rent because the student probably will not have a job or any assets that can be attached.”
Student housing judgment changed the landscape
Stevens also highlighted the significance of the Supreme Court of Appeal judgment in Stay At South Point Properties v Mqulwana, which altered the legal landscape for institutional student accommodation providers.
The judgment confirmed that institutional student housing linked to a finite academic term can be treated differently from ordinary residential accommodation when eviction proceedings arise.
According to Stevens, lower courts are now prepared to grant eviction orders to institutional student housing providers using the common law remedy known as rei vindicatio, which allows an owner to reclaim possession of property from an unlawful occupier.
However, he stressed that private landlords should not assume they can rely on the same approach.
Where a student signs a standard 12 month private lease that is not directly linked to a university timetable or academic programme, courts are likely to regard the property as that student's home. In such cases landlords will generally have to follow the procedures contained in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act before an eviction can proceed.
The hidden cost of legal disputes
Many landlords also misunderstand what happens when they win a court case.
Stevens said an unopposed High Court application can cost between R35,000 and R65,000 in legal fees. Once a tenant files opposition papers, costs can increase dramatically to between R85,000 and more than R180,000.
Even a successful landlord may recover only a fraction of those expenses. He explained that South African law distinguishes between the fees charged by private legal practitioners and the costs that courts allow one party to recover from another. Court awarded costs are calculated according to regulated tariffs rather than actual legal expenses.
As a result, landlords often emerge victorious in court but still face substantial unrecovered legal bills.
Treat student accommodation as a specialised business
To reduce risk, Stevens recommends that landlords tailor lease agreements to the realities of student accommodation.
Among other measures, he suggests clearly identifying the agreement as educational accommodation linked to a student's enrolment at a specific institution. He also recommends clauses providing for termination shortly after the completion of examinations, recognising that student accommodation follows academic cycles rather than ordinary residential patterns.
Stevens further advises that agreements should acknowledge that the accommodation does not replace a student's primary family home and should confirm the landlord's right to regain possession at the end of the academic term.
“The surge in student demand is not going away, and neither is the regulatory scrutiny,” he said. "For private landlords, the safest path is to treat student accommodation as a specialised asset class rather than an informal income stream.
"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.”
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