Warning to South African landlords: Student housing crackdown and R180,000 legal shocks
But according to Just Property chief executive officer Paul Stevens, a growing wave of “accidental landlords” may be exposing themselves to serious legal and financial risks. Without proper zoning, municipal approval and compliant lease agreements, landlords renting to students could face fines, halted evictions, insurance complications and mounting costs that undermine potential returns.
Operating without permission constitutes illegal land use: “Many small landlords wrongly believe that they can fly under the radar. But the Stellenbosch Municipality v [Property Owner] ruling shows that the courts won’t hesitate to issue interdicts shutting down un-zoned communes,” he says, adding 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.”
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 notes. “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.”
Health bylaw violations: 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, he continues, which can invalidate their building and public-liability insurance policies.
“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."
From student beds to senior living
The NSFAS caps: Something else for landlords to consider is that they cannot charge more than the annual NSFAS baseline of R52,000 in 2025 for non-catered, university accommodation in metropolitan areas, Stevens says.
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.
No surety clauses mean no legal recourse: Referencing the Rental Housing Act, Stevens says all student lease agreements have to be in writing. But, he adds, even when landlords do 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. 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.”
A gamechanger for landlords – but at a cost
While the Supreme Court of Appeal (SCA) precedent established in Stay At South Point Properties v Mqulwana has fundamentally changed the litigation landscape for student housing in South Africa, Stevens has concerns.
“Lower courts no longer require institutional landlords to serve PIE (Prevention of Illegal Eviction 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. When assessing new eviction cases, these courts will look for a finite academic term rather than a standard year-long lease.”
Lower courts do not automatically extend this precedent to private residential leases, he stresses. “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.”
Housing activists oppose eviction bill
The real cost of going to court: The true cost of resolving tenant-landlord disputes in the High Court tends to catch property investors off guard, Stevens says, because of the yawning 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, he explains – but when a student files a notice of intention to oppose, these costs can escalate to between R85,000 and R180,000+.
And 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, he states. “South African law recognises two completely separate cost scales: the fees a landlord agrees to pay their lawyer, which drive the R35, 000 to R180k or more range, and 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. As a result, ‘successful’ landlords often end up having to pay a huge shortfall out of their own pockets.”
To minimise legal and financial risk, Stevens recommends incorporating two commonly acknowledged facts into lease agreements: that most students look for accommodation between September and February, and that typically, student accommodation is usually vacant between November and February, when exams end and they return home for the holidays.
Stevens suggests inserting lease clauses to the effect:“The surge in student demand isn’t going away, and neither is the regulatory scrutiny,” says Stevens. “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. The difference between the two comes down to preparation, documentation and a clear understanding of the rules.”
