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Tuesday Sep 30, 2014

Joburg's retroactive service deposits can not be avoided

The City of Johannesburg recently announced that they will be charging retrospective security deposits for electricity and water meters and that two months' average on municipal bills will be charged directly to their account.

This, they say, is in line with the City's bylaws and if the deposit amounts are not paid, they may disconnect services, says Michael Bauer, general manager of the property management company IHFM.

Section 39(1)(d) City of Johannesburg Credit Control and Debt Collection By-laws of 2005 states:

'No municipal service may be provided to any applicant, unless and until an amount equal to the amount prescribed..........has been deposited as security or other security, as prescribed, has been furnished.'

Furthermore, Section 33.1 of the City's Credit Control and Debt Collection policy states:

'All account holders shall pay a deposit for the supply of electricity and/or water by the City calculated as the rate of the deemed consumption for a period of 2 (two) months in respect of the property in question'.

The effect of Johannesburg municipalities' backdating their services deposit requirements could be far reaching in that large amounts will have to be paid over by sectional title or HOA run schemes to the City that they will most certainly not have budgeted for, he said.

They have said that since piloting this project from February this year in various regions, customers chose to ignore the request to pay their deposits. Therefore, they have said, the City is obliged to enforce these bylaws.

Although the City offers up to six months to pay the deposits, said Bauer, there will be huge administrative problems for larger schemes in trying to raise the funds for the deposits and then recovering this from the owners.

Sectional title schemes or HOAs affected by this should not ignore this and should deal with it as soon as possible, applying for a payment plan straight away to avoid the risk of having services disconnected if they do not have the cash reserves to pay the deposits upfront, he said.

IHFM Press Release


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