Affordable residential and student housing specialist Quorum Holdings is the first in South Africa to accept rental deposits in cryptocurrency, and to allow tenants to potentially benefit from an increase in value, the company says in a statement.
While rental deposits are standard practice in South Africa, tenants do not usually benefit from the money being held by their landlords and deposits can be held for several years, depending on the lease, the company explains.
With a growing portfolio expected to reach about 3 000 residential units in Johannesburg over the medium term and another 5 000 beds in student accommodation through subsidiary Urban Circle, the business owns and manages a portfolio of properties.
Quorum Holdings group legal counsel Saul Mayers says this option for rental deposits represents a use case for crypto and a new way of doing business.
“We are excited to be trialling rental deposits in crypto for our latest development in Johannesburg – Forest Views. Depending on how it works, we will expand to other properties in both Joburg and Cape Town.
“Our typical tenants are young professionals, who are familiar with crypto and may want to use theirs as a deposit instead of the standard deposit practice,” he says.
The crypto rental deposit will be held on South Africa’s largest cryptocurrency exchange, Luno.
Tenants will transfer the agreed deposit to Quorum’s Luno business account.
“Tenants may use bitcoin or ethereum to secure their leases, knowing that their crypto will also be held on a safe, trusted platform. The risks associated with the price volatility of crypto are still there, but all gains are for the tenant when they leave the development, with the landlord being prepared to shoulder any possible losses,” says Mayers.
Quorum’s latest residential building – Forest Views, in Bramley (near Melrose Arch) – offers new one- and two-bedroom rental apartments.
The first two months are rent free and the complex has uncapped WiFi, an outdoor gym, kids play area, laundromat, prepaid electricity and security.
The tenant deposit, which is one month's rent, may be paid in rand or cryptocurrency.