Who is responsible for unpaid utility bills

PROBLEMS or conflict between landlords and tenants often end up impacting on the provision of municipal services through payments of rates, water and electricity. But ultimately the City of Cape Town’s service contract is with the property owners, regardless of who makes the payments.

“If there is debt outstanding that is charged against the property, the City has an obligation to take the necessary actions to recover it through the applicable debt management actions,” says Johan van der Merwe, mayoral committee member for finance. The City deals with municipal debt “holistically”.

“In terms of relevant legislation, we have to send out invoices to the account owner advising of the liability they have. If the accounts are not settled after the due date, warning notices and letters of demands may be issued. The warning letters are delivered to the property advising the debtor or the occupier of the property of the imminent restriction/ disconnection of services provided.

“If there is no response, then the next preferred step, in line with legislation, is to either disconnect the electricity supply or recover the arrears debt through prepaid electricity purchases or to restrict the water supply to the residential properties to a trickle, and disconnect the supply for nonresidential properties.”

If there is still no response, debtors may be handed over for legal action to attorneys in terms of the relevant legislation and the city’s approved by-laws and policies.

At this stage Van Der Merwe says it is advisable for the property owners to go to the City offices and either settle their accounts in full, or make arrangements to pay off their debts over an agreed period based on their ability to pay.

Although, the City doesn’t get involved in issues between the tenant and owner, if the occupier of the property approaches the City to suspend the debt management action, and has legal document/s linking them to the property, and has the ability to pay for all debt outstanding, in terms of the Credit Control and Debt Collection Policy, the City has detailed processes which may be followed to ensure the debt outstanding is paid in full, he says.

“Furthermore, if the City is not paid for the debt outstanding by the owner of the property, and there is a legal tenant/occupier in the property, the City can… issue notices and enforce recovery of the debt outstanding… ”

However, since the City of Cape Town made the decision to only put municipal accounts into the names of property owners and not tenants, and therefore deals only with owners, Van Der Merwe says it has seen “fewer and fewer of these issues”.

“We are also advising owners to install prepaid electricity meters and water management devices.”