Having a prepaid meter installed in your rental property is certainly the uncomplicated option that avoids the admin of invoicing tenants and the risk of non-payment.
Hassle-free options are always the better option, right? Well, not according to Grant Rea, Residential Sales and Letting Specialist at RE/MAX Living, who warns that this option is not entirely without its risks…
“In our current economic climate, consumers are facing more pressure on their disposable income, which has led to an ever-growing number of incidents of prepaid meter tampering to bypass the purchase of electricity. Surprisingly, it is easier to do than most realise. Many of the prepaid systems in place do not yet have the function of alerting the municipal entity of such tampering, which leads to costly fines to the homeowner upon the eventual discovery of this tampering,” explains Rea, who reports seeing this occur more readily and, surprisingly, from the most unassuming of clients.
Read more: Dealing with tenants and utilities
“We once discovered – too late, unfortunately – that a tenant had tampered with the prepaid meter and gotten away with months of non-payment. This exemplary tenant left the property spotless and asked us to refund the deposit soonest, to which we happily obliged owing to the resplendent condition of the property. It was only when the new tenant moved in that the problem presented itself in the form of a zero glowing on the display panel of the prepaid meter while electricity continued to run throughout the property.”
Following this discovery, Rea logged a query with the City of Cape Town who sent a technician to repair the meter. The technician explained that it is far too easy to do. Rea later learned that the following occurs after such tampering is discovered:
- A fine is immediately generated and directed to the property owner.
- The City establishes the exact last date of which units were bought using the meter number and a backdated charge is then applied to the property owner based on the average consumption of previous months.
“Although it is a criminal offence, the City is not always willing or able to pursue offending tenants even when full details of the tenant are provided, along with an affidavit to confirm the property was rented. We, therefore, had to spend a considerable amount of time tracking the outgoing tenant and attempting to extract costs out of them. Landlords also need to remember that unless it is noted that a meter is correct and in operation at the beginning of a leasehold, they will be unable to prove that it was that particular tenant who did the tampering and thus will not be able to claim damages from the deposit,” Rea explains.
Rea, therefore, suggests that the lesson to be learned is never to assume that anyone is beyond the illegal use of electricity. “If the display says zero and the lights are on, you have a problem,” he concludes.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, suggests that landlords, therefore, hire a reliable rental specialist to manage the property on their behalf so that many of the hassles of dealing with these kinds of issues can fall to the agent and not to the landlords themselves.
