PREPAID METERS FOR ELECTRICITY AND WATER BEST FOR SECTIONAL TITLE SCHEMES

Private Property South Africa
Michael Bauer

Members of sectional title schemes who are charged for water and electricity in relation to the floor size (which is done through participation quota) of their units have for some time complained regularly that this method of billing is totally unfair.

“These complaints,” says Michael Bauer, general manager of the property management company, IHFM, “are usually valid. We had one scheme of 22 units in which after the installation of separate meters it was found that the occupants of two units were responsible for 70% of the total municipal cost.”

This type of situation, he says, is not uncommon and is typically found in bodies corporate with a high investor ratio, where the landlords have allowed the units to be overcrowded, often well beyond the capacity for which it was designed.

In the past, said Bauer, SA’s electricity and water costs were so low that the situation did not lead to serious problems. With the latest price hikes – and those to come, from both Eskom and the municipalities – the situation will be a great deal more serious.

The only practical solution to the problem, said Bauer, is to install separate “post-paid” sub-meters for each unit so that people are charged in relation to their actual consumption for municipal services.

Even this system, however, can have problems because the occupants most likely to abuse the system and consume municipal services recklessly are also those most prone to avoid paying their bills and their levies on time.

For this reason, said Bauer, there is now a steady swing to prepaid sub-meters which will cut off the supply when the occupant runs out of credit.

On most sectional title schemes, said Bauer, the installation of a separate meter costs roughly R1 900 per unit. This may require a special levy to be raised but IHFM, his firm, has found that the savings to the majority of owners result in their installation being paid for within three years – to their huge relief.

In schemes where there may be numerous high consumers it can be difficult to get sufficient votes to go ahead for the installation of separate meters – but a good managing agent and/or trustees will in the end win through because separate billing via prepaid meters is quite obviously the fairest system.

To download a free manual on prepaid meters, go to: http://www.sectionaltitlesa.co.za/banner/Sectional%20Title%20Kit.pdf

Michael Bauer is a regular contributor to www.sectionaltitlesa.co.za. For further information on IHFM’s services go to www.ihfm.co.za or telephone Michael Bauer on 083 255 4442. He can also be emailed on michael@ihfm.co.za.

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