BY CILNA STEYN (Managing Director, SSLR Attorneys Incorporated)
Q– Mark Saunders, Johannesburg:
I am a landlord struggling with non-paying tenants, I use prepaid meters for electricity in all my properties. The meter reading company I use told me that they can load any arrear rental payments onto the electricity meter, which will mean that the tenant must pay the rent before he can buy electricity. This sounds like a great way to collect rent, but is this legal?
A– Cilna Steyn, SSLR Attorneys
Prepaid utility meters have changed the working of rentals substantially. For a very long-time municipalities allowed tenants to register the accounts in their own names, this was changes by most municipalities over the past few years, at this moment most municipalities will only keep the owner of the property responsible for the utility account. This left many owners with their hands in their hair. The popularisation of prepaid meters changed this position, by using prepaid meters landlords will not run into high unpaid utility bills from the municipality without the ability to collect this from the tenant, should the tenant abscond or default on rental payments. Many meter reading companies allows landlords to load any payments onto the meters, which will mean that there will be a credit on the particular account which has to be paid before electricity or any other utility services can be purchased.
At this point it is crucial to first consider the relationship between occupation of a premises and utility supply to a property. Physical occupation of an immovable property is only an element of possession of the property. Possession of immovable property is more complex than just physically being in the property, in that you do not necessarily have to occupy in person. In other words, you do not have to physically live in the property to occupy the property, you might be in possession by merely having the keys and the right to occupy, whether you then occupy or not does not change the fact that you have possession of the property.
Utility supply might not seem like something a person can be in possession of, because utilities cannot be possessed as such. However, considering the nature of immovable property, utility supply to the premises is a very crucial part of possession of immovable property. We have seen in many court cases that the courts consider utility supply to be incidental to occupation. If we pause at this point to consider this, it becomes clear that without utility supply to a property, occupation is still possible, but is made nonsensical.
The reason why we are discussing possession is to consider a question of the reader, we need to discuss the effect on possession when disallowing the tenant to purchase electricity until the arrear rental has been paid. The act of depriving another person from possession is called spoliation and all courts have jurisdiction to grant a spoliation order and order that the person that was deprived of possession be placed back in possession. The possession referred to when discussing spoliation is possession of movable as well as immovable property, and crucial to this point is that the possession does have to be lawful possession to be afforded protection by this remedy. In other words, an illegal occupant’s possession cannot be disturbed in any way. The only way to legally deprive a person of any possession is by obtaining a court order.
Loading arrear rental onto an electricity meter would mean that the tenant is effectively deprived of possession, by disallowing them to purchase prepaid services which will be nothing other than spoliation. As creative as this solution might be it is illegal and if dealt with by a court of law the landlord will be compelled to place the tenant back in a possession to have the full utility supply. In most cases the landlord will also be ordered to pay the tenant’s legal cost for spoliation application. I will always advise to stay away from any for of arbitrary evictions.