Many trustees and managing agents follow the course of disconnecting municipal services when scheme members do not pay either or both of the following:
- Levies
- Utility Bills
Using disconnection as a means to force payment for non-payment of levies or utilities is a very contentious issue.
It often happens that a body corporate disconnects the electrical supply to sectional owners who dispute their bills, fail to pay them or pay them late.
One particular incident occurred in December 2000 when the owners of the sections appealed a joint and urgent application to the High Court. The High Court ordered the body corporate to immediately restore the electricity to the section as well as pay all of the incurred costs of the appeal by the owners.
It is very important to mention that the electricity was disconnected due to non-payment of special levies. This shows the incident was unrelated to electricity consumption payments. The electricity bill was never in question.
The example above raises the question: Would the outcome have been different if the disconnection was due to non-payment of electricity? Legal experts simply reply “no” to this question. The reasoning behind it lies in the fact that a body corporate – unlike Eskom or local municipalities – is not a power supplier and hence cannot terminate said supply.
The body corporate is portrayed in this matter as a distributor of supply. In simple terms, it purchases electricity from its local municipality and then re-distributes the supply to the sectional title units. The Sectional Title Act does not obligate the scheme to have individual meters. However, the reasoning behind supplying individual electricity meters is very obvious.
It is clear that unit owners must pay their levies and supplies otherwise they live as parasites at the expense of other owners. In addition, they burden the body corporate’s cash flow, resulting in a degradation of the standard of living, which in turn causes the property value to depreciate and diminish the lifestyle in the sectional title scheme.
The abovementioned outcomes are neither radical nor imaginary, but frequently occur in places such as the Johanneburg CBD and other areas that have periodically deteriorated to an extent where repairs are difficult.
Many sectional title owners and property practitioners would love to see a change in legislation that will enable a body corporate to cut supplies to non-paying section owners within regulated and controlled systems that are fair and not arbitrary.
We believe the reason why this law has not yet been enacted is due to a very real possibility of abuse. In the current environment body corporates already cut electricity and supplies for reasons such as loud noise, wrong parking, non-payment of levies, and numerous other matters.
Furthermore, such body corporate issue penalties are often applied in very arbitrary ways. For example: If the chairman’s son is found guilty of an offence, then the penalty will not be applied. However, if anyone else is found guilty of an offence then penalties will be applied with maximum effect. Such conduct is found to be very common in sectional title schemes.
Extending the law by giving more rights to body corporates could potentially result in further abuse of rights and gross misconducts, meaning that however justified the reason for disconnection may be, the body corporate cannot interfere with the supply of water or electricity. When body corporates are asked why they employ such measures, one answer always prevails: “Because it works”. Naturally it works, but there are easier and more legal ways of doing it.
If the body corporate is granted rights to disconnect electricity or any other supplies, the process needs to be done in a fair way towards all defaulters, without any exceptions. Furthermore, utilising prepaid metering will completely eliminate all non-payment. In addition, it will probably cost less than all the accumulated arrears, legal fees and other costs which the body corporate may incur in the long term.
Recovering unpaid levies the legal way
It’s very sad to mention that in South Africa, body corporate arrears are growing into the millions. These are not only bad for property values, but negatively influence the lifestyles of the people living in the sectional title schemes.
The Sectional Titles Act and Rules describe legal and effective ways of recovering debts. These are, and always have been, available to body corporates to use and implement.
Section 37 of the Act requires the body corporate to establish a levy fund to which every owner must make contributions, calculated according to the Participation Quota (PQ) of the owner’s section. The body corporate has the right to pursue legal action and also has the right to charge interest on arrears and to recover the legal costs from defaulters.
The problem is that body corporates are not pursuing and acting on their rights under the Sectional Title Act. This includes the lack of procedures and processes for debt collection and then processes for instituting legal action, should it come to that.
Processes for debt recovery may include:
- Sending friendly letters on a certain day of the month if the debt is not paid
- Following up with additional warning letters at established intervals
- Final demand letters
- Handing over the account to attorneys with instructions to issue summons
It is really simple. Unfortunately very few, if any, body corporates have created procedures for arrears collection, and then even fewer follow them.
At an Annual General Meeting (AGM), the trustees should write to all owners to remind them of the policies regarding levies and arrears. Under section 39(1) of the Sectional Title Act, the body corporate may even issue a directive to clearly instruct the trustees to implement the abovementioned procedures.
In conclusion, we can establish that in most cases, body corporates have not yet exhausted all legal and procedural options before they use utilities disconnection as a means for debt collection. This fact alone can make disconnection of electricity or other services very unfair from various points of view.
Source: www.PrePaidMeters.co.za.
Hi there.
I am hoping you can help me.
I am trying to establish whether it is legal for the managing agent of a sectional title complex, to cut electricity if levies are paid late – without any prior warning.
Not too long ago, I was on a business trip and forgot to pay my levy. Upon my return, my electricity was cut. I promptly went to their offices and paid the levy. That evening the electricity was connected again.
Upon receiving my levy statement, I was charged “sundries” of R280. When I queried this, I was told that I was charged R280 to reconnect the electricity.
Is this legal?
Hi Michael,
I had my electricity switched off due to arrears iro my levy payment on 11 Feb 2011. I paid the arrears the same day so as to get reconnected at 4.30pm. However, I am horrified at the way this was done. The managing agent of my complex in Gauteng came through in the morning and switched off my electricity supply without warning or notification. This only came to my notice as I employ a domestic worker who immediately phoned me. I could thus then make arrangements to leave work to pay. IF I did not have a domestic worker, I would have only found out at 5pm and it would have been too late to make payment – thus I would have to endure the remainder of the evening without power.
Please advise if this is legal. To which body can I report this matter to?
Subsequent to my payment, I received a statement today for a charge of R500 for reconnection. I am unaware of any prescribed fee for reconnection.
Your assistance will be highly appreciated.
Best regards
Vishal Sewchand
Hi Michael
Our scheme consists of 29 units. One particular owner who has been here for about 25plus years has been and is particularly troublesome. For the last 3 years he has taken to playing his guitar with apms for at least 2 hours per day, i.e. 8 until 10, at times for longer. I am one of the Trustees and we have had numerous complaints in this regard, which have been addressed by us and by me personally and he simply refuses to either wear head phones or to ‘insulate’ his unit or quieten is music.
His neighbours, also owners, have in desperation moved out of their unit this week. A neighbour further down is recovering from cancer and cannot rest and children from various units are trying to study for exams. His neighbours approached a magistrate who apparently said he could play for 2 hours per day. Recently the police were called in to quell the noise but he just says that people around him are lying.
He has no bell and locks his security gate, so I/we cannot gain access to talk to him, or even to knock on his door!
I live further away from him and though I do not find the music to be unbearable, I don’t think that I would like to have this constant noise.
Our Conduct Rules obviously deal with this, but how do we enforce it, as the Rules do not state what action will be taken. Can you please advise me is this regard.
This is rather hurried, as this problem takes up a fair amount of my time of which I do not have much to spare!
Regards
Shelley
Dear Shelly,
Thanks for your email. Sorry for the late reply. 3 things to do:
1. Call the police when he plays guitar and let them deal with the complaint and lay a charge against.
2. If this does not help, go to arbitration; or
3. Get a High Court order to stop him playing his guitar.
There is only one way of dealing with this, and that is decisive action right away.
What I would do is to call the cops when he playing again, get a case number, get sworn affidavits from all neighbours and owners, and if possible get a noise reading from a consultant when he plays, and immediately go to arbitration (it is more cost effective).
If you win, this will be made an order of the court, which is just like an interdict.
If he breaches this court order, it is a criminal offence and the Police will arrest him and he will be charged.
No more threats, you must do it.
Hope this helps.
Michael
Hi there
Hope you can help me. I have a unit in a small complex and each unit has its own individual meter. Is it legal for the chairman of the body corporate to lock the box and deny me access to the meter unless she is present?
Thanks
Bronwyn
Hi Bronwyn,
Thanks for your email. The trustees are responsible to manage and maintain common property. As such they may decide how they do so. In other words, it is not illegal but is not logical because what are you going to do?
It is rather questionable.
Hope this helps.
Michael
Hi
I would like to know, if I can purchase prepaid meter for electricity and water, I stay in a Sectional Title Complex. They keep on reading my meters incorrectly.. Do I have to use the currect supplier, as I don’t want to deal with them any more.
Can the Body Corporate stop me from installing my own prepaid meters.
Regards
Mr Silva
Dear Nelson,
Thanks for your email. Yes, they can prevent you from doing so. Most prepaid meter system work as a unit, so a single unit does not work.
However, you can apply for the installation and you can also rally support from other owners. If a majority of owners applies in writing to the body corporate, then they will have to do the installation.
However, this may result in a special levy.
It may be easier to monitor your meter readings and complain.
Hope this helps.
Michael
Hi Michael,
I live in a sectional title complex. I was 1 month in arrears with my electricity and they then cut it off with no warning. They then refused to reconnect unless I pay the full arrears as well as R550 reconnection fee.
The owner of the house closed his water account at the municipality and said we should transfer to to our name. They cut the water supply. They have now reopened his account and charged him R2500 but the water pipes in the communial area are leaking and we have told the municipality. The owner now wants to charge us R2500 for this.
What is legal and what is not?
Regards,
Miss Desperate
Hi Gizella,
Thanks for your email. Are you a tenant or owner?
In my opinion, it is not legal for the body corporate or the trustees to disconnect electricity services and charge a reconnection fee. I suggest you challenge them on that (refer to the article http://www.sectionaltitlesa.co.za/2011/09/to-cut-off-the-electricity-or-not-to-cut-off-the-electricity/ ).
The owner has to pay for the connection fees. Unless, you were in arrears, this should not be your problem.
If you are a tenant, I would lodge a complaint against the owner at the Rental Housing Tribunal and actually I would terminate the lease and move out as fast as I could.
Hope this helps.
Michael
Hi Michael
I own units in a building. We had an sgent manageing the affiars on our behalf but did a very bad job of it.
The end result si that electricity has not been paid on any of the units for 18 months. I paid the levy account each month, but the electricity was supposed to be paid by the tenant and confirmed by the agent.
the end result was that interest was charged on these amounts.
These interest charges were capaitilised and after investigation I found that there were some payments made. They added these to my account but made no adjustments to my account for time. as these payments were made months before.
Kind regards
marno
Kind regards
Marno
I understand that interest may be charged on levies in arrears, is this also true for electricity, and if so, should it not be more in line with what the municipality will charge you? I have caught up the arrers electricity but am in a dispute with the body corporate on the interest as it is an excessive amount.
Dear Marno,
Thanks for your email. Just to understand, your managing agents managed your rental properties on your behalf as the owner or property investor? If so, you as the owner are liable for the payment of those electricity charges although you recover them from your tenants as part of the lease agreement.
In the eyes of the body corporate, you have to pay your levies and your recoveries irrespective if your tenant has paid you.
I think you learned a valuable lesson here.
In your relationship with the agent, they provided you with bad service and caused you damages. I suggest you lodge a complaint against this agent at the Estate Agency Affairs Board.
The body corporate can charge almost any interest rate they resolve. I came across some they charge 34% per year.
Hope this helps.
Michael
Hi There
I own a flat that has been let out on my behalf by a managing agent. Since 2005 the Municipality has been billing the body corporate for electricity consumption instead of the unit. As a result the tenants were just consuming electricity without paying for it. The body corporate has since informed the municipality and now as an owner I am sitting with an electricity bill of over 6 years of consumprion. The tenants has since moved out, please advice what is my recource in this regard. Your advise will be highly appreciated.
Regards
Mike
Hi Mike,
Thanks for your email. This is a huge problem. According to the lease, the tenant is responsible to pay his share of the operating costs or consumables. Hence, you can now collect the funds from him. However, bear in mind that you may well end up paying even more money (throwing good money after bad money) in tracing and legal cost to actually just end up with a dispute and even with prescription (this means anything older than 36 months cannot be recovered from a debtor by a creditor, if it was not invoiced).
I suggest you obtain legal advise on 2 things. First, if the municipality can charge you for more than 6 years and not only for 36 months and secondly the cost of recovering the debt against the actual debt.
Then you can make an informed decision.
Hope this helps.
Michael
Hi Mike,
The complex i stay has has cut off my electricity due to non-payment of levies. We havev had no electricity for about 3 months because of this. We have prepaid meters so there is no way that we are even in arrears for electricity payment, and the managing agents charges us 30% more for the electricity.
We are currently having a dispute over the levy charges: they have been incorrectly billing us for over a year, and because of that we have refused to pay the amounts that they have sent us.
What recourse do we have againt the trustees and the managing agent? Is there also legal action that can be taken that will hold them accountable for all the food that has been spoiled and the negative psychological effects that it has had on my family?
Regards,
MK
Good Day
I live in a complex with 50 units for almost a year now, unfortunately due to my own negligence i did not check the body corp’s financials as we were sweet talked by the selling agent into believing nothing could be wrong, now almost a year later i will find out that they owe the municipality over 40k in arrears water bill, now they want to impose a special levy on us(R200 extra) to try and get rid of the arrears, in their words ” punish the owners who are paying”, i already had my electricity cut twice by the municipality even though my levy and rates accounts are paid in full, i also found that we were not insured for two months. It was suppose to be me and my fiance’s happy beginning but has turned into a nightmare now, please advise on what action i have to take?
we are thinking of selling the place now.
Thanks
Kobus
Hi Kobus,
Thanks for your email. Frankly, get rid of the managing agent and the trustees. Elect trustees who have an understanding of finances and business and turn the building around.
I suggest you consider calling an SGM using PMR 53 and submit a vote of no confidence.
Hope this helps.
Michael
Hi There
I have been living in a sectional title complex since 2006, owner. I have worked from home for the last 2 years and had no problems. Now they have new trustees and are changing all the rules. I dont get clients at my unit, only a delivery from the courier every now and then. The rules are so bad, i might as well move to a retirement village. Fines of R 500.00 for numerous things, silence between 1 – 4pm on a sunday. No noise after 10pm on week ends and lots more.
Can they just change the conduct rules to suit them?
Thank you
Tash
Dear Natasha,
Thank you for your email. No, they can’t. It requires a special resolution which must be passed at an special general meeting and then those amended rules must be registered at the deeds office.
Unless, you were not at the meeting or they did not have a special resolution passed, those rules are not legally binding.
Hope this helps.
Michael
Hi there
I moved into a complex September last year without any agents cos the flat was advertised by the owners. I am a tenant at the unit. As per my lease agreement the water & electricty is in the owners name & i get billed monthly for the rent together with the electricty & water. In December last year we had family over & the gate to the complex was damaged but not my guests fault. Ever since we moved in the gate has always been a problem cos it is forever not functioning. We approached The Body Corporate about this & they felt that we are responsible. We told our Landlord about this as they were well aware of how troublesome the gate is.
We eventually received a bill for it at the end of January together with our normal billing. I responded via e-mail to our landlord & told her that we are not prepared to pay for the damage to the gate as our guests van was damaged as well & prior to this my sister had also damaged her car but we overlooked that matter since we were new in the complex. i paid my rent & electricity as normal on time except for the bill for the gate. Without giving us any warning they cut my lights yesterday & when we got home at 7 lastnite we had no power & we have a little child. I called the Body Corporate & they said i need to pay the amount for the gate together for the late payment & reconnection fee. I have paid it in full this morning and the Body Corporate said they will reconnect it within half an hour. I feel that they have been unfair to us & they gave us no warning & the amount i paid has nothing to do with the electricity so how can they disconnect it.
It was embarrassing for us as we were the only ones with no lights & we had to transport all our food & store them with family & we had to stay over as well.
Please can u advise us . Why did they terminate the electricity . The payment of the gate has nothing to do with the electricity. Please help.
JG
Hi Michael,
Thank you for your response. The meeting will be held on the 12 March, stated those conducting business or work from home will be penalised? Is this legal?
Were can i get legal advise please. Secondly can anyone become a trustee or chairperson without knowledge of the Complex?
Thank you kindly
Natasha
Dear Natasha,
Thanks for your email. Pleasure. It can only be illegal if your conduct rules say so or will be changed or the zoning scheme does not allow business or commercial activities.
Generally speaking, what is the difference between an accountant or retail outlet. It is foot traffic. How do you determine that and how do you impose penalties?
There are quite some technical issues and legal issues to address.
Your second question, yes everyone can be a trustees except people with charged with fraud, dishonesty or are insolvent.
Hope this helps.
Michael
Dear Jenisha,
Thanks for your email. You are absolutely right. The gate has nothing to do with the lights.
The body corporate is at fault and you can take legal action against them re the disconnection.
W.r.t the gate, unfortunately you are responsible for your occupants, guests, and visitors. This obligation or responsibility is delegated to you as per PMR 69.
You in turn have to recover the damages from you guest or his insurance.
Hope this helps.
Michael
Hi Michael
Thank you for your advice. Much appreciated.
Jenisha
Hi Michael,
Thank you once again. You are really helping me. Would you be able to refer me to someone that can assist with this matter as this Body Corporate is doing what pleases them and if i need to get legal advise on working on my computer in my own home then so be it. I have to stand my ground as this is my home that i have invested alot of money in.
I would like to address this before the meeting held on the 12 March.
They want to peanlise me for the courier delivering to my house every now and then? Should everyone get penalised for having a pizza etc delivered? Please advise on who i can contact for legal assistance asap.
Regards
Natasha
Hi Natasha,
Thanks. Generally speaking, you should consult an attorney (with experience in sectional title not conveyancing) to assist you with this matter.
Thanks
Michael
I have dispute regarding my rates , informed thé trustees and thé body corporate however my problem is still not yet resolved and they are busy charging me penalties. They cút grass for everyone except my complex due to this unresolved issue which resulted in arrear did complain to thé chairman thé issue is not resolved and my house is got big grass as if nowone stays please advice What to do.
Dear Micheal
Firstly I wanted to thank you for your such a great blog and for all you help to others – its great to see such a positive initiative!
I am in the situation where my tenant has not paid his electricity and water on and off for the past 8 months in the sectional title unit that i own- currently he owes me R12k I have sent him numerous requests and have been chasing him since November. As you can imagine i am at my wits end.
I have finally sent him a letter of demand as his lease expires at the end of april an I am afraid he will default.
In our contract , which is a standard tenancy agreement for all homeowners that lease in our estate in Ballito in KZN , there is a clause that i can get a court order to shut of his electricity after i send him a letter of demand – I have sent one today but want to know how i go about getting a court order if has not paid within the 7 days?
Should i seek legal advise and if so can i charge this back to him?
Thanks
Chris
Hi,
The complex i stay has has cut off my electricity due to non-payment of levies. We havev had no electricity for about 3 months because of this. We have prepaid meters so there is no way that we are even in arrears for electricity payment, and the managing agents charges us 30% more for the electricity.
We are currently having a dispute over the levy charges: they have been incorrectly billing us for over a year, and because of that we have refused to pay the amounts that they have sent us.
What recourse do we have againt the trustees and the managing agent? Is there also legal action that can be taken that will hold them accountable for all the food that has been spoiled and the negative psychological effects that it has had on my family?
Regards,
MK
Hi
I was proactive and installed prepaid electricity meters in my apartments. This was done over a year ago and the system has been working perfectly. The prepaid meter is through a private company and sits within my apartment. Recently the body corporate has decided to install prepaid meters in all apartments. They have decided to outsource the electricity supply to another company who in turn will install prepaid meters. I have been told by the the body corporate that I will have to pay for the prepaid meter irrespective of the fact that i have my own.
My questions are :
1) are they allowed to force me to install another prepaid meter ? They have receive majority vote to go ahead
2) the prepaid meters will be installed within my unit, does the body corporate have the right to make adjustments within my unit as this is not common property?
3) is there anyway I can argue not having to pay for another prepaid meter?
Thank you is advance
Hi, we have been home owners of sectional title for the last 7 yrs. We have a Managing agent and Four other home owners that Rule our complex. They have self appointed themselves as Trustess, and we as home owners had a meeting and kicked one off the trustee only to find they had their own meeting and change our decision without informing anyone. The have meeting that arent scheduled and dont inform home owners and when questioned we are told no one attended hence they entitled to go ahead. How can we attend if we have not been informed. As home owners if we are late on our Electricty payment our supply is terminated and we are cahrge interest, penalty and reconnection fee, is this Legal? surely we dont have to pay R285 to reconnect our services for a trustee to switch the button back on? why interest and penalty, who does this money go to, and why should home owners pay this as one can not sell ones property without getting a clearnace certificate, what can we do about this, and is the a way of fighting the Managing agent and trustees on this as well as claiming back what we were forced to pay?