Tag Archive: eviction procedure

Unpaid municipal bills – what’s a landlord to do?

The sting in the tail when a tenant moves out is often a legacy of unpaid bills

Your tenants have moved out, either willingly or through the eviction process. Then you get hit with a large unpaid rates bill by the local municipality. What do you do?

Utility bills can be a sore point for landrlds and tenants. They don't have to be.

If it comes to this, the answer is very little. It’s more important to avoid this scenario altogether. We’ll look at what to do if this happens to you, and in Utility bills – who’s responsible and how to manage them we show you how to prevent it happening again.

Whose bill is it anyway?

Ultimately, the payment of utilities and taxes (often combined in one “rates” bill by the municipality) is the responsibility of the property owner. You may agree that these will be paid by the tenant, but if the tenant reneges on this obligation, the municipality will be within its rights to chase you as owner for payment.

The account may be registered in the tenant’s name, and you may have ensured a watertight wording in your lease agreement to this effect. But don’t take too much comfort from this. There have been many cases of tenants vacating premises and leaving accounts left unpaid. Property owners would deny responsibility as the account was in the tenant’s name. Municipalities, understandably, ran out of patience and many now do not allow the account to be in any name other than the registered owner of the property. If the account was registered prior to this decision, it may still be in the tenant’s name, but unfortunately that does not absolve you of the liability for the account.

Recovering unpaid bills from a tenant

Your first port of call is of course the deposit. For this reason it is a good idea not to be too hasty in returning the deposit after the tenant moves out. They will of course pressure you for prompt payment, particularly if they have to pay a deposit on a new property. But you are within your rights to ensure there are no outstanding unpaid bills against the property as well as checking the inventory and inspecting the property for damage. If you have taken two months’ rent as a deposit, hopefully you will have enough to cover what is owing. However, this may not be the case if the rates have gone unpaid for some time or if there are cleaning and repair bills to cover too. 

If the deposit in insufficient to offset the debt, in the first instance try to contact the tenant and ask for settlement. Be reasonable and offer to accept payment by instalments. An acknowledgment of debt signed by both parties is a good idea. If the tenant does not offer or is unable to pay the full amount upfront, you must pay the bill yourself. Failure to do so may result in the property’s utilities being cut off, which will only give you a bigger headache if you have new tenants or are trying to re-let the property. Recovering the debt is your problem, not the municipality’s.

Recovery via Small Claims Court

It is always better to settle amicably and out of court, but if that fails, and the debt is less than R20 000, you can pursue the debtor through the Small Claims Court. You do not need an attorney for this action and indeed are not permitted to be represented by one. Find your nearest Small Claims Court and contact the Clerk of the Court, who will instruct you in the procedure.

Help from the services of an expert lawyer

The Small Claims Court has limited powers. You may not be successful in recovering your unpaid municipal bills, or the amount may exceed R20 000. If you choose to continue to pursue your tenant for the money, you will need to sue them, using the services of a suitable law firm experienced in litigation. At this stage you will have to decide whether it is worth the hassle. Sometimes the prudent course of action is to cut one’s losses and move on. This is a personal decision, and we at SDLAW will support you if you choose to litigate.  

Prevention is better than cure

If you are reading this because you have been stung by a tenant, it is of little consolation to know that the situation could have been prevented. But presuming you will continue to lease your property and manage tenants, you will want to take the necessary steps in future to ensure you are not landed with an outgoing tenant’s rates bill again. Read Utility bills – who’s responsible and how to manage them to find out how to avoid this sting in the tail.

Seek the guidance of an expert eviction lawyer

If you need to pursue a tenant who has left you with unpaid municipal bills, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za to discuss your case in confidence. Eviction lawyers Johannesburg and Cape Town are experts in rental property and will help you choose the most appropriate course of action for your circumstances. We will also advise you on lease agreements and tenant screening to ensure your tenancies run smoothly in future.

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Utility bills – who’s responsible and how to manage them

The end of a tenancy is not the time to discover your tenant has not been paying the municipal bills or “rates” – property taxes and utility bills like electricity, water and sewerage, etc. At that stage you are faced with the difficult task of trying to recover the money. It is far better to ensure due process is in place from the outset of the occupancy to cover all bills that will accrue to the property. This is best done via a written lease agreement, which sets out the terms and conditions of the rental and can be as detailed as you like, clearly stating the responsibilities of tenant and landlord for every cost. For example, you may wish to differentiate between utilities like water and electricity and “add-ons” like WiFi and garden maintenance. 

Rental Housing Amendment Act

Remember that when the Rental Housing Amendment Act comes into force it will be a requirement to have a written lease. If you don’t have one now, it’s time to draw one up. You will only have six months from when the Act becomes law to comply. This is your chance to incorporate all these details into your rental agreement with your tenant. 

Prepaid electricity meters

One of the simplest ways to avoid disputes over electricity bills is to install a a prepaid electricity meter. This is becoming more and more common in rental properties. The landlord has the comfort of knowing the electricity is paid for, and the tenant has control over consumption and can make economies if necessary, an option not available if the rent is “all-in”, i.e. the landlord pays the bills and allows for the costs in the rent charged (see below). Many municipalities no longer allow electricity accounts to be in any name other than the registered property owner, so a prepaid meter is a good compromise. The landlord remains the responsible person, and the tenant has no choice but to pay for use. If the account is not in the owner’s name, perhaps because the tenant has been in situ for a long time, it is a good idea to have the account transferred, as the owner will be held liable regardless.

Other utility bills

If the municipal account is still in the tenant’s name and the tenant is responsible for payment, the landlord can ask the tenant for proof of payment each month. If this is not forthcoming or there is any suspicion of arrears, you as registered owner are entitled to ask the municipality for a copy of the account. If you exercise diligence in ensuring these accounts are up to date, you will avoid any nasty shocks at the end of the rental period. 

“All-in” rent

An option some landlords prefer is to take on the liability for all bills (sometimes with some exceptions as noted above). The rent is then adjusted to accommodate this. This is known as an “all-in rent”. There are pros and cons to this arrangement for both parties. For the tenant, it can be helpful, certainly in terms of budgeting, to have one monthly fee to pay. The cost of living in the property won’t vary summer to winter with changing consumption patterns. For those on a tight budget this can be a real boon. The downside, from the tenant’s perspective, is that there is no financial benefit to be gained from minimising consumption. (And this may lead to waste, a downside for the landlord.) The tenant also does not have any utility bills in their name, which can be a problem when address verification is needed for credit or other applications. However, the lease will usually suffice.

For the landlord, there are no concerns about unpaid bills. Everything is under their control. However, the adjusted rent is based on past average consumption. If the tenant is wasteful in their use of water, gas or electricity, the owner can be faced with a bill in excess of what has been included in the rent. The solution to this is a clause in the lease agreement stating that the landlord reserves the right to make a surcharge should consumption exceed reasonable amounts (“reasonable” can be difficult to define so the wording may refer to a figure or percentage). The landlord will also bear the burden of rate hikes, as they cannot increase the rent until the lease is due for renewal.

The alternative – charging utility bills to the tenant as they arise

A more transparent, albeit more labour-intensive, solution is to charge the utilities to the tenant as they arise. This means the landlord will always carry one month’s obligation for these costs and may still be left with unpaid bills at the end of the tenancy, but any liability will be limited and should be covered by the deposit. If this process is adopted, property owners should remember that tenants have a right to be treated fairly and equitably. It is good practice to:

  • Provide the tenant with copies of bills and meter readings
  • Give the tenant a formal invoice for their share of the costs as set out in the lease agreement
  • Avoid charging the tenant an estimate if the meter reading has not been done for the period. Many Rental Housing Tribunals do not support this practice. It is usually possible to email a photo of the meter reading to the municipality and request an accurate bill
  • Provide the tenant with a monthly statement and keep a record of all communications pertaining to utilities (this is particularly important for transparency where the rent is all-in)

It’s important to note that a property owner may not charge property taxes to the tenant. The cost can be factored into the rent, but may not be passed on to the tenant in a literal sense. 

Whether you opt for an all-in rent or charging the tenant on a PAYG basis, this can be a workable solution, particularly for a property owner who has been saddled with unpaid bills in the past. At the end of the lease, it is reasonable to deduct any amounts owing from the deposit, and this should not trigger a dispute, particularly if clearly stated in the lease.

Landlords may not…

Finally, if you hold control over power and water, it may be tempting to use this as leverage if your tenant fails to pay rent or breaches the lease conditions in any other way. Don’t do this! It is unlawful to disconnect your tenant’s electricity in the event of non-payment of rent. Disconnection without a court order is illegal. If your tenant is in arrears with rent, you must follow the correct eviction procedure as set out in the Rental Housing Act and Consumer Protection Act (CPA) and give them an opportunity to rectify the breach. 

Seek the guidance of an expert eviction lawyer

If you need help to draw up a lease agreement, screen tenants or negotiate utility bill arrangements with your tenant, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za to discuss your case in confidence. Eviction lawyers Johannesburg and Cape Town are experts in rental property and will help you select the best option for your circumstances. We will ensure your tenancies run smoothly, with no nasty shocks waiting in store for you.

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Red Ants continue to disregard due process of law

Illegal evictions and fatalities are calling cards of Red Ants

At Cape Town eviction lawyers Simon Dippenaar & Associates (SDLAW), we were angered and saddened to learn of recent illegal actions by the Gauteng security company Red Ants. The Red Ants firm specialises in “urban management support services for human settlements”, and was established to counter the influence of large, multinationals who dominate the South African economy. Its mission is “to protect, train, empower, serve and provide food security to our communities”. A noble mission indeed, yet more often than not the Red Ants are the cause of homelessness in those communities rather than providing security, food or otherwise.

Evictions should be lawful and respectful. Rend Ants act illegally.

As eviction attorneys we uphold the rights of property owners under the law, but we also fight for tenants whose rights are threatened or disregarded. We defend the Constitution, and base our law practice on the citizens’ rights bestowed therein. Eviction law has been carefully crafted to protect the poor and the vulnerable, after decades of exploitation and unfair practices under apartheid. Everyone has the right to adequate housing. Therefore the recent actions of the Red Ants in Gauteng are disappointing and disturbing.

Shacks destroyed in Alexandra Township

Earlier this month, more than 80 shacks, allegedly built illegally and too close to the Jukskei River, were destroyed by the Red Ants in Alexandra, Johannesburg, rendering 100s homeless. However, the Red Ants are not solely to blame. Johannesburg Mayor Herman Mashaba has said that the demolition was unlawful and should not have been authorised by city officials. The eviction order was in fact obtained in 2016 (before Mashaba was elected), but the eviction not carried out until now. Mashaba vows to “get to the bottom of it” and rebuild the demolished structures timeously.

Marshall St, Johannesburg

Last October, the Red Ants were also involved in a mass eviction in the Joburg CBD. In this case, residents were not forewarned of the eviction and many of their personal possessions were destroyed, in a callous and brutal removal that took place while many occupants were at work. We can only imagine the horror of returning home to find your belongings damaged or destroyed and your home uninhabitable. Occupants of the Marshall St building were mostly domestic workers, taxi drivers and informal traders, vulnerable individuals with limited means either to replace their possessions or to take action against the city. In this case, according to Tshepo Skosana, the sheriff who carried out the eviction order did not act in accordance with due process of law and “was negligent in fulfilling his duty to inform the residents of their pending eviction, which made the process illegal”. The Red Ants were the purveyors of brutality, but not the cause of it.

Death in the Vaal

It’s bad enough losing one’s home, but eviction should not result in loss of life. Sadly, this is precisely what happened in April when an eviction in the Vaal area of Gauteng, again facilitated by the Red Ants, led to clashes with community members. Two died, one from the Red Ants and one from the community, and six were injured. Yet again, the Red Ants and the Sheriff were acting on a court order to remove occupants from illegally erected shacks. The casualties happened when a fight broke out between the residents and the Red Ants.

Duties of the Sheriff

As Eviction Lawyers in South Africa, we do not condone the construction of unlawful dwellings. Residents should act within the law in choosing a site and erecting a structure. However, the current housing situation in South Africa does not always make that possible. Although there is a comprehensive social housing strategy that includes RDP homes, Community Residential Units (CRUs) and Upgrading of Informal Settlements (UISP), waiting lists are long and government has fallen behind in meeting its housing commitments to the poor and vulnerable in our society. It is no wonder communities sometimes take matters into their own hands. Section 26 of the Constitution guarantees the right to adequate housing, so they are only claiming their constitutional rights.

But landowners also have a right to the proper use of their land, so they may seek an eviction order when homes are built illegally. However, the court has an obligation to consider all circumstances before granting the order. According to Skosana, if occupants will be made homeless, there must be provision of alternative accommodation for an eviction to be lawful. The court must also consider the number of women and children and old people affected by the eviction and this will influence the amount of time granted before the order can be served. Turning people out of their homes with no warning breaches these conditions and more. 

The Sheriff’s role is serve court documents. This includes orders of eviction. The Sheriff has a duty to inform the occupants of the situation, in terms they will understand, and this includes their right to be represented in court. The Sheriff is also obliged to treat everyone with dignity and respect, and ensure that belongings are properly looked after during an eviction. The use of violence and threats in effecting an eviction is an abuse of the Sheriff’s authority.

In all these cases the Sheriff acted together with the Red Ants to intimidate residents and damage or destroy their possessions. Neither party can claim that they implemented a legal process.

Protection under the law

Residential tenants are protected through the Prevention of Illegal Eviction Act (PIE) and the Consumer Protection Act (CPA). A stringent eviction process is meant to safeguard human dignity, property, and ultimately life! As a specialist eviction attorney we are diligent about observing lawful eviction procedure. We condemn the abuse of power recently demonstrated by the Sheriffs and Red Ants involved in these evictions.

Landlord or tenant – let us help you

Eviction lawyers are now in Johannesburg, Pretoria and Durban, as well as Cape Town. So wherever your property is located, we can help you with an eviction matter, whether you are landlord or tenant. If you have been the victim of an illegal eviction, call us today.

Contact Eviction Lawyers South Africa on 086 099 5146 or email sdippenaar@sdlaw.co.za

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