Early precautions could save time and money in recouping utilities costs

Many rental properties don’t have prepaid water and electricity meters, so landlords may receive statements of account for these each month for payment by tenants.

“If tenants fall into arrears with either of these accounts, landlords must act immediately and not allow the sums to build up, nor should they have to pay these bills on behalf of tenants,” says Gail Cawood, rentals manager at Knight Frank Residential SA.

“The first solution that should be considered is installing prepaid meters as these will place responsibility for payment of the services in the hands of tenants. This also encourages responsible use as tenants will note their consumption and can budget accordingly.”

The cost of installing prepaid meters is about R1 500 each, which are available through various installers. Tenants then buy the services through vendors which immediately absolves landlords of any responsibility for these accounts.

If installing prepaid meters is not possible, landlords should carefully monitor the bills and payments. As soon as there is any shortfall in payments from tenants, landlords should send them notice giving them 20 days to remedy the breach. If they don’t pay the outstanding amount in full, it is grounds to cancel the lease as there is a breach of contract and legal proceedings can begin.

“Lawyers will also need to give tenants 20 days’ notice, so the sooner the warning process starts, the better,” says Cawood.

“If landlords leave the bills unpaid and tenants’ services are cut off this could create problems for landlords, in whose name the services are registered, as they are ultimately responsible for paying the bills. The best thing to do in all situations when things start to go wrong is to be proactive in sending warnings to tenants to the effect that they are in breach of contract,” says Cawood.

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