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5 must-knows for renting accommodation to students

04 Oct 2016

Student accommodation has become an extremely important part of the renting of residential property. It comes with different norms and standards, and often with much misinformation and lack of understanding for all parties - students, agents and landlords.

Marks says the most common problems experienced by agents or landlords apply to the state of the property, the ingoing inspection and the non-refund of the damages deposit.

Vivien Marks from the Assessment and Training Centre for Estate Agents, says most student accommodation involves providing partial furnishing of a property as the majority of students who require accommodation are either foreign or from other areas in South Africa.

Marks says basic furniture is usually a bed and mattress, chair, built-in desk or table, a cupboard, as well as a small bathroom. There may be communal facilities such as kitchen and laundry plus a recreation area. 

“It would be wise to draw up a set of reasonable house rules stating exactly what is expected from each student to avoid any future problems,” she says.

“Fines are often levied for noise, late payment or any other violation of the lease agreement. Note that the Rental Housing Act provides exactly the same rights to students as it would to any other tenant.”

Many students have their parents as signatories of a lease agreement, ensuring that the rent is paid regularly.

“In university towns such as Stellenbosch and Grahamstown, rent is paid a year in advance in order to secure accommodation, whether or not the unit is used every month,” says Marks.

“Note that, legally, the student becomes the occupier of the property with the parent/signatory being the legal tenant. This tenant is responsible for any breach of the lease agreement that may occur during the lease period.”

Marks says the most common problems experienced by agents or landlords apply to the state of the property, the ingoing inspection and the non-refund of the damages deposit.

Marks discusses these issues:

1. Initial state of the property

Marks says most student accommodation involves providing partial furnishing of a property as the majority of students who require accommodation are either foreign or from other areas in South Africa.

The Rental Housing Act and the Consumer Protection Act applies to student accommodation as it would apply to all other residential accommodation.

The property should be habitable with all basics being in a good condition underlined by the Consumer Protection Act Sections 53 to 55, stating that everything should be in a condition of quality.

Many cases have shown that a lot of student accommodation is in a poor state, for which landlords demand high rents.

2. Ingoing inspection

It is imperative to conduct an ingoing inspection which must, according to the Rental Housing Act, be attached to the lease agreement.

New students are often too busy enrolling or settling down, or just ignorant of the implication of the inspection, to meet with a rental agent for an inspection.

Make a point of recording your request for this inspection and send it to both the student and the signatory in advance, keep the date and time, even if the student does not attend.

Carry out the inspection and record everything as expected. Immediately inform both parties that the inspection has taken place in spite of the non-attendance of the student and attach a copy for their information.

Any maintenance or repair complaints in the future will have to be compared with this inspection. 

3. Outgoing inspection

The same applies here in that the occupier must be informed in writing that an outgoing inspection will take place ‘at a time to suit both parties’ (note Rental Housing Act).

There are cases where this inspection has been conducted the day before the student had vacated, after which a wonderful farewell party was held. The student must be ready to vacate so that the keys can be handed over to the landlord or agent, ensuring that there will be no further damage.

“Fines are often levied for noise, late payment or any other violation of the lease agreement. Note that the Rental Housing Act provides exactly the same rights to students as it would to any other tenant,” says Marks.

Damage claimed must be discussed at this inspection, and the signature of the occupier must be obtained.

If the student does not keep the date, the inspection should be carried out by the landlord or agent, and the legal tenant contacted thereafter with evidence that the occupier had been informed in advance and had not attended.

4. Refund of damages deposit

This has become common practice in that innumerable deposits are being unfairly withheld by rental agents who cannot provide proof of the necessary inspections or the opportunity having been given to the tenant to ‘make good’ on the damage.

This is clearly classed as an unfair practice, and a case can be lodged with the Rental Housing Tribunal.

Ignorance of the law is not an excuse, particularly when it involves a deposit which belongs to the person who paid it, and not to the landlord or agent.

It is expected that deposits are fairly and carefully returned with reasonable amounts deducted for damages, less fair wear and tear.

5. Value added tax (VAT) on student accommodation

There has recently been an interesting article in the press from a prominent firm of attorneys explaining the payment of VAT on student accommodation.

VAT is not payable on residential rentals, but is payable on commercial rentals. Where a landlord lets a building to a university or college which in turn rents the units to students, this may be regarded as a commercial undertaking and attract the payment of VAT.

The Rental Housing Act defines a dwelling very clearly as being where a person is using a property as a residence, and not as a business. No VAT is payable by a tenant of a residential property.

Should agents have landlords who are in this category and demand the payment of VAT, it would be wise to contact the necessary authority and not charge a student.

The residential accommodation purpose of the property should be explained. The landlord would have to absorb this payment personally.

Interested parties can view training videos on the website.

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