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Monday Oct 14, 2013

Sectional title owners' water, power rip-off

Thousands of sectional title property owners in Joburg are being overcharged for water and electricity by the City of Joburg by as much as 22 percent.

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City Power and Johannesburg Water charge customers on a stepped tariff - in other words, the more people use, the more they pay.

But in many complexes, because City Power and Johannesburg Water issue one collective bill, individual users are all charged at the highest rate of consumption, even if their consumption is very low.

Attorney Chantelle Gladwin said she receives hundreds of complaints about this. 'It has been brought to our attention that the city is billing sectional title schemes incorrectly, or unfairly discriminating against consumers who own sectional title units in respect of billing them for electricity and water,' she said.

In free-standing houses, consumers are billed at a certain rate for the first 500 units of electricity consumed; a higher one for the next 500 units, and so on, until 3 000 units are consumed.

Anything above 3 000 units is charged at the highest rate applicable. However, in sectional title schemes, the council is ignoring the fact that there are multiple users. In other words, it is billing for consumption for the entire scheme. This leads to a situation where more than a 100 units are charged as one free-standing house, resulting in every user being charged at the highest applicable rate.

Therefore, if an individual owner uses less than 500kWh, he or she will be charged at the highest rate and not benefit from the lowest price on the scale.

Gladwin said there was nothing in law that authorises the council to apply the highest tariff to bodies corporate without allowing each unit the benefit of the lower rates that the proper application of the step tariff renders to freehold owners.

'There is, further, no justifiable reason why the city would be allowed to discriminate between an owner of a free-standing house and an owner of a sectional title unit. This is blatantly discriminatory and unlawful.'

This could easily be remedied by the council updating its records to reflect the number of units in the scheme, and by updating its account details to reflect not only the number of units in the scheme, but also to change the calculation method to allow for all units in the scheme to be billed for the average consumption at step tariff rates.

'The city should take into account the number of units in a scheme, and thus, when calculating consumption charges, it should consider that each unit is entitled to be billed at the step tariff,' Gladwin said.

For example, if there are 10 sectional title units in a scheme, each unit is entitled to be billed for the first 500 units of electricity consumed at the lowest rate and, therefore, the sectional title scheme collectively is entitled to be billed at this same rate for the first 5 000 units of electricity (500x10).

The same principle applies to water consumption as well, said Gladwin. 'Many trustees and managing agents are unaware of this, and are further unaware of whether they are indeed being billed correctly for the scheme's consumption, and they should check their bills.'

In instances where she had engaged the council on this issue, the city had adjusted the manner of billing to bring them into line with the law, she added.

City Power spokesman Sol Masolo said that in terms of the 2013/14 charges, if bodies corporate of complexes, flats and cluster developments approach the City of Joburg with an affidavit declaring the number of units in use in the complex, normal consumption tariffs would apply.

'This clause seeks to address discrimination and inconsistencies concerning the treatment of sectional title consumers and those residents in free-standing homes,' he said.

The Star


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