Electricity hikes set to hit tenants
THOUSANDS of tenants are going to lose the battle to meet the monthly cost of renting their homes unless they and their landlords prepare for Eskom’s price hikes, says Andrew Schaefer, chief executive of property manager Trafalgar.
“Eskom proposes increasing the cost of electricity by 45 percent a year for three years, after raising it 33 percent this year. Electricity that costs 60cents/KwH now is expected to cost R1.60 by 2012.
“Where the average monthly charge per flat is R800, it will be nearly R2 160. This will mean electricity costing more than monthly rent and most people are unprepared for this,” says Schaefer.
“We know of one flat in Hillbrow where the tenants are paying R1 700 a month and their electricity is costing R2 900. The flat is overcrowded, occupants have a score of cheap heaters, hair dryers, TV sets and other appliances, and of course the hot water geyser is working all day.”
He says sectional title bodies corporate face the same growing crisis.
“Common property electricity makes up about 11 percent of the average levy now. That will increase to about 15 percent by 2012. The biggest problem in sectional title buildings is that the bodies corporate are responsible to the authorities for privately used electricity, so if individuals fail to pay, the rest of the owners will have no choice but to carry them. Pre-paid meters will become essential in all buildings.
“Landlords must beware of unrest, with them carrying the blame for the higher costs; they can’t avoid taking responsibility for their tenants’ growing stress,” says Schaefer. “A way of helping would perhaps be to reduce the 10 percent rent increase at the end of the lease, to say five percent for tenants who pay on time, don’t overcrowd and who look after the properties.”