Early precautions could save a landlord much in time and money in recouping costs.

20 July 2015

In many rental properties there are no prepaid water and electricity meters and the landlord will receive the accounts for these each month for payment by the tenant renting from him.

If the tenant falls into arrears with one or both of these accounts, the landlord must act immediately and not allow the sums to build up over any period of time, nor should he have to pay these bills on behalf of the tenant, says Gail Cawood, rentals manager at Knight Frank Residential SA.

The first thing that should be considered is the possibility of installing prepaid meters as these will place responsibility for payment of the services in the hands of the tenant rather than enabling him to use as much as he’d like without any guarantee that he will pay in full every month. This also encourages responsible use as the tenant will see what he consumes and can budget accordingly, she said.

The cost of installing a prepaid meter is in the region of R1 500 per meter (available through various installers) and the services are then bought through a vendor by the tenant which immediately clears the landlord of any responsibility of handling these accounts.

If the installation of prepaid meters is not possible, the landlord should monitor the bills and payments carefully. As soon as there is any shortfall in payments from the tenant, the landlord should send him notice giving him 20 days to remedy the breach. If he does not 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 20 days’ notice so the sooner the process starts of warning the tenant, the better.

If the landlord leaves the bills unpaid and the tenants services are cut off this could be problematical for the landlord as the services are in his name and he is ultimately responsible for the payments.  The best thing to do in all situations when things start to go wrong is to be proactive in sending warnings to the tenant to the effect that they are in breach of their contract, said Cawood.

 

For further information contact Gail Cawood on 021 671 9120 or email gail.cawood@res.za.knightfrank.com