New property company to guarantee tenant deposits and breakages

Should a tenant abscond or leave a property in a bad state, the newly launched Guarantee Exchange South Africa (GEXsa) can provide guarantees to long and short-term rental agents and owners.

The company will also provide financial flexibility for cash-strapped consumers who are credit worthy but struggle to come up with a three-month rental deposit.
This will help consumers who are hampered financially by having to pay a two to three month's deposit. Instead they can sign an agreement and pay a nominal fee based on their monthly rental in lieu of the deposit. Having checked the credit worthiness of the individual, GEXsa will be able to have a guarantee issued to the owner or agent within a matter of minutes.

"Due to changes in the macro environment, a one month security deposit has become insufficient.  With the demand now for two to three months rental as a security deposit, it is difficult to conclude rental agreements," says Cathy Foster GEXsa CEO.

"The biggest challenge facing landlords and rental agencies for both short and long term rentals is securing a reliable tenant, who has the correct credentials, can afford an adequate security deposit and firmly commits to return the property in the same condition it was handed over to them.

"The short term rental market requires much more than three months for breakages - thus the reason for guarantees of a higher value which range from R200 000 to R700 000."

Tenant details are recorded on the GEXsa website which is connected to the Tenant Profile Network(TPN) to assess tenancy history. Paperwork is then logged online and once all documentation has been loaded and payment has been made, a guarantee is issued.

The Guarantee is issued to the owner or rental agent and an email confirming that the Guarantee has been issued is mailed to the tenant. 

 "The cost to the lessee is determined by the rental contribution which is marginal in comparison to a three-month rental deposit which is the norm," says Cathy Foster.   
GEXsa Guarantees are underwritten in partnership with SA Guarantee Specialists, a registered UMA dedicated to this specialist sector of the market. All the guarantees will carry a claims paying ability rating of AA (or better).  The lessor will therefore always have peace of mind that all of the guarantees will be honoured and that SA Guarantee Specialists will facilitate the claim process in the event the lessee fails to pay rental or the cost relating to damages. The lessor is settled in full and SA Guarantee Specialists will pursue outstanding debt from the tenant.

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