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IOLProperty - South African Property For Sale
Tuesday Oct 02, 2012

Separate billing of water and electricity in sectional title schemes could solve woes

Payment of electricity and water bills in sectional title schemes is often a contentious issue, as there are often people who do not pay on time or some who do not pay at all, says Michael Bauer, general manager of IHFM sectional title managing agency.

Sometimes when developers begin their applications for developments and subdivision takes place, they decide to install bulk meters instead of pre- paid or post- paid submeters for each unit. In the long run this creates much more administration work for the body corporate and there is a higher risk that accounts won't be paid on time, or at all," says Bauer.

"The other problem that arises is the way in which the costs for water, sewerage and electricity are divided. Traditionally it is according to the participation quota in the scheme, in other words, the size of the unit instead of the actual consumption.

"This system is inequitable as there could be a single person in a large, three-bedroom unit, using very little, and a family of four next door in a two-bedroom unit. The single person would use less water but would pay a higher bill than the four people in the apartment next door."

He says the way to solve problems about consumption of services is to fit meters monitored by the body corporate or to fit prepaid meters. That way there will be accurate and fair billing for each unit's actual consumption.

Prescribed Management Rule 33 (3 and 4) says that if the majority of owners in a sectional title scheme request in writing that the body corporate install such meters, then the body corporate must do so.

The cost of installing these meters must be borne by the body corporate but the question often arises whether the funds are available to do so. The average installation would cost in the region of R1 500 plus VAT for each meter. The outlay might need to be funded through raising a special levy.

"The other question that could be asked is what the actual consumption is for each unit. If the amount is around R100 a unit, installing individual units doesn't seem viable, but if the figures for each unit run higher it might be worthwhile.

"The benefit of having individual meters is more in the fair billing for each unit, which is better for the scheme in the long run as most owners don't want to run the risk of subsidising other owners' usage of water or electricity."

Michael Bauer
www.sectionaltitlesa.co.za

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