Most lease agreements specify that tenants are responsible for paying the monthly utility accounts – including electricity and water – whereas landlords are responsible for rates and taxes.
However, property owners are ultimately responsible for municipal accounts for utilities consumed on their properties, whether or not they are occupying the property. This means that landlords will have to foot the bill if tenants don’t pay their post-paid utilities accounts each month.
In sectional title schemes, utilities costs can often be a body corporate’s largest expense. And, if municipal accounts get too far in arrears, there is a chance the local authority can cut services to the entire scheme.
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The best way to avoid this problem for sectional title schemes and individual landlords alike is to install prepaid electricity and water meters for each property.
Benefits
In addition to payments being made in advance of the utilities being used, a benefit of installing prepaid water and electricity meters for each unit is that it creates awareness of how much water and electricity are being used. Seeing their consumption on a monthly basis will encourage many people to cut back on their consumption.
For tenants, prepaid electricity and water meters enable them to monitor their usage and manage their budgets accordingly.
For landlords, a prepaid meter eliminates the risk of being stuck with a massive utilities bill if tenants don’t pay. Prepaid meters also come with smart security measures that eliminate tampering. Meter tampering is a worry for landlords because meter owners (property owners) are responsible for paying any municipal fines issued for illegal connections. They could also be held responsible for paying back bills that estimate usage from the tampered meters.
For sectional title schemes, the advantages of prepaid meters include vastly improved cash flow management. Non-payment of municipal accounts could result in the municipality terminating services to schemes where bills stack up. With prepaid meters, utilities are paid for upfront by the owners or tenants before the bill arrives from the municipality, effectively eliminating this risk.
Installing prepaid electricity and water meters is a win for all involved.
Writer : Sarah-Jane Meyer
