- AGREEMENT NEEDED TO ARRANGE FOR SUPPLY OF ELECTRICITY
1.1 Agreement concluded
Section 5 of the By-Law determines that anyone wishing to use electricity on
premises must first enter into an agreement with the municipality. No-one may use
electricity on premises before such an agreement was entered into.
1.2 No Agreement
However, if electricity is consumed on premises in the absence of an agreement, the
owner of the property is liable for the costs thereof (section 5(2)). (This differs from
the position under the 2004 By-Law in terms of which the user was liable for the
costs.)
- WHO IS LIABLE TO THE MUNICIPALITY FOR THE COSTS?
2.1 Generally
The 2010 By-Law provides that the 'consumer' is liable for the costs of the electricity
supply to the premises (section 18(1)). It is very important to note here that
'consumer', in the By-law, is defined as:
??In respect of agreements for the supply of electricity entered into after
16 April 2010, the owner of the premises.
In other words, despite the fact that a Tenant entered into an agreement with
the Municipality for the provision of electricity, after 16 April 2010, the owner
of the property is the party that remains liable to the municipality for the cost
of supply of electricity to the premises. It is therefore crucial that the
Landlord, in the lease agreement, covers himself adequately against the risk
that the Tenant who may have undertaken to pay the electrical account, fails
to do so.
??If the agreement for the supply of electricity was entered into before
16 April 2010, then the 'consumer' is regarded as:
o the occupier of the premises (ie the person actually occupying or the
person who may legally occupy the premises);or
o if the premises are not occupied, the person who entered into an
agreement with the municipality for the supply of electricity; or
o if there is no occupier or agreement in place, it will be the owner.
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In other words, where there was an agreement for the supply of electricity,
entered into before 16 April 2010, the owner of the premises only becomes
liable to the municipality for the electrical expenses if the occupier or person
who concluded an agreement with the municipality, did not pay the electricity
bill.
2.2 When a clearance for transfer of the property is required
It is important here to note the provisions of section 18(6). It reads:
"(6) Notwithstanding the fact that an occupier has an agreement for the
supply of electricity , should the owner of immovable property apply for a
clearance certificate ?then such owner will be liable for all charges due ?in
respect of the said property, in order to obtain such certificate."
This has the effect that, notwithstanding any agreement between a tenant and the
municipality for the supply of electricity and the resulting liability of a tenant for the
cost of the electricity supply, the municipality will look to the owner to pay outstanding
electricity accounts if the owner wishes to obtain a clearance certificate. In such an
instance it will be up to the owner to claim such expenses back from the Tenant and
a lease agreement should protect the interests of the Landlord. (There was no
similar provision in the 2004 By-Law.)
- CUTTING THE ELECTRICITY SUPPLY
3.1 Outstanding account - electrical supply
The By-Law provides that the municipality may cut the electricity supply if an account
is not paid on the due date (section 21), provided proper notice is given of the
intention to do so and reasonable opportunity was granted to the defaulter to make
representations to the municipality regarding the proposed disconnection. (The
requirements to which such notice must comply are listed in section 21(2) of the Bylaw.)
3.2 Outstanding accounts - municipal service fees, property rates and other
municipal taxes
Importantly, section 21(1)(b) allows for the cutting off of electric supply if the person
liable therefore, is in arrears for other municipal charges. In other words, where a
Landlord is in arrears with his municipal account relating to the leased property, the
electric supply may be cut. This may expose the Landlord to a damages claim from
the Tenant, whose use and enjoyment of the premises, in terms of the lease
agreement, has been disturbed.
3.3 Mistake/omission on electricity supply account
It is important to note that section 18(3) determines that even if there is an error or
omission in any account received, the consumer remains liable to pay the correct
amount that is due.