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.
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.
With a growing portfolio expected to reach around 3,000 residential units in Johannesburg over the medium term and another 5,000 beds in student accommodation through a subsidiary Urban Circle, the business owns and manages a portfolio of properties.
Saul Mayers, Group Legal of Quorum Holdings, says that this innovative 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.”
The crypto rental deposit will be held on South Africa’s largest cryptocurrency exchange, Luno. Tenants will simply transfer the agreed deposit to Quorum Holdings’ 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.
Marius Reitz, general manager of Luno for Africa commented, “Bitcoin was developed as a medium of exchange. As cryptocurrencies become more mainstream, we expect to see increased adoption. Quorum Holdings offering tenants the option to pay their rental deposits in crypto will benefit the tenant.”
Quorum’s latest residential building Forest Views in Bramley (near Melrose Arch) on major transport routes offers brand new rental apartments which have one or two bedrooms, a bathroom and lounge. The first two months are rent free and the complex has uncapped wifi, an outdoor gym, kids play area, laundromat, prepaid electricity and exceptional security. The tenant deposit, which is one month rent, may be paid in Rand or cryptocurrency.