Landlords coining it, collecting cash for empty flats throughout lockdown

A Pretoria father has been paying up to R7,000 per month this year for a vacant Pretoria apartment, while his university student son lives with him in Johannesburg.

And he is apparently not the only one, since this appears to be an ongoing trend among families of university students across the country, who found themselves locked into lease agreements prior to and during the Covid-19 lockdown period.

Some parents have chosen to keep paying rent in these unoccupied or partially occupied apartments, in order to secure accommodation “in case things go back to normal”. Others feel they cannot get out of lease agreements with landlords because of the risk and hefty penalties involved.

This means some landlords are collecting thousands of Rands in rent from tenants who are unable to occupy these properties because of the Covid-19 pandemic.

Stefan*, a 64-year old father from Sandton, says his 23-year-old son and a roommate entered into a lease agreement amounting to R14,000 per month for a two bedroom flat in Hatfield, Pretoria. Both roommates are students at the University of Pretoria, but soon after beginning their second year of studies, the university moved for lectures and assignments to commence virtually with no indication as to when ‘normal’ classes would resume.

“In our case the specific landlord waived the first two months, which reduced the monthly rental to R11,600 per month,” says Stefan.

Also Read: Property market recovering, but no plain sailing ahead – report

No choice but to pay

But how do families justify paying for an unoccupied apartment they don’t own?

“We don’t have a choice,” Stefan remarks. “Once you sign the lease you are obliged to a 12-month rental period. There are no release clauses, with or without penalties. We have not even switched on the water or activated the electricity or Wi-Fi agreements. We have not occupied the flat for a single night this year.”

He adds that he thinks it is unfair that landlords are able to make as much money as before the lockdown changed everyone else’s lives for the worse.

“The students do not know whether or not they will have to return to lectures on campus for any other reason during the year, therefore they need to have somewhere to go in case they must return. There is no shared risk or cost. It all sits with the student. Water bills come in monthly whether the water is used or not.”

In Makhanda (Grahamstown) in the Eastern Cape, a general shortage of student accommodation still haunts Rhodes University students, many of whom have opted to live in privately owned spaces during their studies. But some students who are studying remotely or on a hybrid system have had to fork out thousands per month for apartments they have not been able to occupy this year.

Charmaine Els, an estate agent for Pam Golding, says she is aware of very few of such cases (four or five ) where students are paying full rent and not occupying the rented space. In many cases, she says, landlords have been able to work out deals to accommodate the extraordinary circumstances many students find themselves in by partially waiving some of the fees and entering into payment arrangements.

Also Read: Students shut down Rhodes University for entire week

Landlords have it tough too

Recent data shows that landlords have been largely left at a financial disadvantage by the lockdown period, especially in the realm of student rental property.

According to the Rode’s Report on the South African Property Market, flat vacancy rates in South Africa have not fully recovered from the initial hit taken by the market in 2020, during the initial lockdown period.

Though a slight improvement on the vacancy rate has been seen in the first quarter of the year, at 12% down from 12,9%, this is still well above the 9,2% average of 2020, despite the improvement. According to the report, high vacancy rates have led to weaker rental growth.

Stats SA data shows that flat-rental growth in the fourth quarter of 2020 slowed to its weakest since 2009, the report notes, at a rate of 1,7%.

A Johannesburg-based property company says the student accommodation market has been hit especially hard by the uncertainty brought on by Covid-19. The company has 525 student accommodation beds, ranging from from one-sleepers to three-sleepers, but this year, nearly half of those beds are empty, says Urban Einstein’s Chief Operating Officer (COO) Jan Nel.

“What happened with the initial lockdown period is that we took a massive knock and people simply absconded and ignored the lease completely, to such an extent that we had to write off R1,4 million in bad debt. It has had such a massive effect on our business that even now with the third wave it has created problems for us, and only 55% of our accommodation is in use,” says Nel.

“The balance is empty. The reason for that is to do with the uncertainty that has also had an effect on the students. We were also effected by the late exams for matric, which were written in late 2020 and the results were only available in 2021, and so then we didn’t have the usual intake of students from January onward and that was pushed up to about March or April.”

Simnikiweh@citizen.co.za