Is the Tenant or Landlord Responsible for the new City of Cape Town Electricity Home User Charge?

by Marlon Shevelew, of Marlon Shevelew & Associates Inc.

From July 2018 the “electricity home user charge” has be added to municipal invoices from the City.

The home user charge is a monthly service delivery charge of R150, payable by residents who are on the Home User Tariff (residents who live in properties valued at R1 million or more). This amount is much lower than the figure of R251,85 which was proposed in 2017/2018 but not implemented.

The charge appears as a separate line item on your rates account from the City starting, July 2018.

Previously, those residents on the domestic tariff who used less than 600 units of electricity per month were subsidised by other customers, as they did not purchase enough electricity to fully cover the costs associated with maintaining their service connection.

The new charge has been introduced to make things fairer. Whether you use less electricity, or none at all, it still costs the same to connect you to the network. The revenue from the charge will be used to cover the cost of maintaining the service connection.

Under the new charge, residents will pay less per unit for the first 600 units of electricity. This will compensate for the introduction of the service delivery charge to some degree.

Whether the landlord or tenant is responsible for payment of this additional charge depends on the wording of the lease.

If the lease states that the tenant shall pay for all electricity consumed at the premises, then I would argue that the landlord must pay — however, it would be advisable in future to amend leases to cater for this charge by stating more specifically which party is responsible paying the added amount.

Should it be unclear, and the lease states that the tenant is responsible for paying the electricity account, then I would argue that the tenant must pay the added charge. This added charge is set off, to some degree, by the reduced rate per unit.

Where the property has a meter and tenant pays for electricity by purchasing recharge vouchers the landlord is liable for the added charge

In short, unless the lease expressly states that the tenant must only pay for electricity “consumed” or where the property has a meter and tenant pays for electricity by purchasing recharge vouchers — in which case the landlord is liable for the added charge — in my opinion the tenant would be responsible for paying the additional charge, as invoiced, since it forms part of the “account” for which the tenant has agreed to be liable.

Written by our Rental Property Attorney,by Marlon Shevelew, of Marlon Shevelew & Associates Inc.

About the Author

Shaun is the Rentals Operations Manager for the Harcourts Maynard Burgoyne Group.