Real Estate Investor Magazine South Africa June/ July 2019 | Page 29

A
s the economy continues to impact people's wallets,
more property owners are looking to sub-let a part of
their space for extra income.
But doing your own kwH meter readings or splitting
electricity bills between tenants can become a nightmare
for landlords, body corporate and management agents -
especially when disputes arise over their use of shared utilities.
Regardless of whether your tenant ran their air conditioning
or heater the whole week, you're on the hook for the whole
electricity bill to the council, until you can manage to make
them pay up.
Here are some tips on your options to collect the electricity
more easily via prepaid technology (and also dispute the bill
from the council if it doesn't look right). According to Citiq
Prepaid, the biggest prepaid meter and utility vending system
provider to landlords and municipalities, it might sound
obvious, but you'd be surprised how many people still don't
know how it works and expose themselves to unnecessary risk.
Eliminate electricity bill shocks and disputes
with prepaid metering
Finding fair ways to pay for shared utilities in multi-tenanted
properties is a perennial headache for owners and tenants alike.
‘Lack of information leads to a lack of trust on all sides,’ says
Citiq Prepaid managing director Michael Franze. ‘Disputes
over electricity bills are a major problem in the property sector,
and they cost everyone a lot of time, money and frustration.’
The root of the problem, says Franze, is that councils are
normally only prepared to provide one electricity council
meter per property, regardless of how many dwellings there
are. ‘This leaves landowners, tenants and body corporates with
a very limited set of options. They can agree to split the bill
pro rata, which encourages overuse and inevitably leads to
conflict; or they can install their own kwH meters and read
them every month, which is administratively costly and also
leads to disputes if tenants don’t trust the readings.’
The growth of electricity resellers over the past couple
of decades only partially solved the problem, he adds. ‘At
first resellers appeared to be the solution to the problem of
inconsistent municipal billing and tenant non-payment, and
the sector boomed. But eventually many of the new entrants
went out of business, and regulations were tightened up after
a series of scandals. In the end, the property owner is still the
one legally liable to pay the electricity bill – using a reseller just
defers the problem.’
Franze says prepaid sub-meters provide transparency and
reduce risk for everyone involved. ‘For tenants, prepaid makes
their own electricity consumption more visible and ultimately
more manageable. If you only get your bills a month or more
in arrears, it’s easy to forget that day you accidentally left the
heater on and wonder if the landowner is overcharging you.
When you can track your consumption from day to day, or
even from hour to hour, it’s much easier to budget.’
For landowners, body corporates and managing agents, he
says, the benefits are equally tangible. ‘With Citiq Prepaid, we
collect money from tenants and other end-users upfront and
keep it in a trust account. The only charge is an 8.75% handling
fee which is completely transparent to all users. At the end of
the month, the money is transferred to the landowner and they
pay the municipal bill directly. This enables the landlord to stay
in control of the billing relationship with the municipality, but
with no collection issues.’
Franze adds that Citiq Prepaid provides a range of reports
to electricity users and landlords alike, which can be emailed
or accessed through an online dashboard. ‘Complicated
information is a source of disputes, so we’ve put a lot of
effort into making sure our reports are easy for everyone to
understand. Tenants can easily access their payment history
and see exactly what they paid for, and landowners can see
information for all their properties and quickly identify
pilferage or discrepancies between the council bill and what
tenants spent. If there are problems, our call centre is open
seven days a week. It’s all about keeping the lights on.’
SA Real Estate Investor Magazine JUNE/JULY 2019
27