City Council utility accounts – are you at risk?

Posted: July 4, 2024

City Council utility accounts – are you at risk?

In a Sectional Title Scheme, the City Council provides a bulk connection for the supply of electricity and water for the entire Scheme. This includes all the units and any usage by common property for common property lighting, the entrance structure and system such as gates and access control, watering of common property gardens, amongst others.

This means that, in essence, the City Council considers the Scheme as a single client and not as multiple individual owners. This method of billing by City Council has both its advantages and disadvantages.

The advantages being:

  • A single account requiring payment for electricity, water, sewerage and any other charges Council is entitled to charge.
  • Each owner will not receive an account other than their own rates and taxes, and in the case of some Councils, refuse.
  • Should there be an error in billing it affects only one account and not an account for every unit in the Scheme.
  • The Scheme does not have to rely on Council reading multiple electricity and water meters.

The disadvantages being:

  • The entire Scheme can be disconnected for non-payment. This will affect both owners settling their levy account and those owners who are in arrears. However, the Scheme does not have the right to disconnect individual owners.
  • The Scheme bears the cost of the infrastructure from the bulk meters to each unit.
  • The Scheme must install meters to each unit, read the meters monthly and calculate and charge the consumption to each unit.
  • The Scheme owns the meters connected to each unit and must maintain or replace these meters when faulty.
  • City Council may occasionally charge estimated consumption charges, which may or may not be grossly under or overcharged.

It is a well- known fact that City Councils in South Africa are struggling financially and are currently on a drive to ensure income is received and to manage accounts that are outstanding.

If your scheme is currently struggling to settle your municipal accounts, you are urged to enter into a payment arrangement with City Council to avoid penalties, interest charges and disconnection of electricity or water to the entire Scheme. Should you enter into this type of payment arrangement, it is essential that the Scheme put measures in place to ensure sufficient income is received to maintain your arrangement with City Council.

Article Date: July 2024
Author:  Paul Brent, ANGOR Property Specialists (Pty) Ltd

You may also find the following article interesting: How to open an account and who is responsible for paying the rates and taxes account