GEORGE NEWS - If half of your electricity purchases are nabbed by George Municipality, it means you are behind on your municipal tax payments.
A local property owner was shocked to find out that lessees who rents one of her properties lost R500 in electricity when they recently made a purchase of R1 000. "I was two or three days behind in payment for municipal property tax. I thought I had at least 30 days before being penalised," said the owner.
She was referring to a sliding scale that forms part of the options the municipality may apply when collecting debt from property owners. According to the scale, a 10% deduction will be made after 30 days of non-payment.
However, it is important to note that the sliding scale is not the option used and applied by George Municipality.
"George Municipality's latest Customer Care, Credit Collection and Debt Collection policy (as approved by Council on 30 May 2023) states that the municipality may apply the sliding scale at the discretion of the municipality (point 3)," said Riaan du Plessis, Director of Finance.
"The sliding scale is therefore optional. George Municipality implements point 2 of the policy, where a 50% deduction on your prepaid purchase is applied as soon as the account is in arrears."
Du Plessis said a 50% deduction on all arrear accounts is applied. "If an account is in arrears, 50% will be deducted from electricity purchases. Therefore, deductions of arrears at 50% are correct and in line with the approved policy."
Asked about the legality of these hefty deductions, Du Plessis confirmed that it is indeed legal and said it is in fact a requirement of law that a municipality must collect all money due and payable to it.
"All actions taken and currently in process are in terms of the applicable legislation. The collection of accounts in arrears is a vital source of revenue and cash flow for any municipality. National Treasury prescribes a collection rate of 95%."
Lessees
The fact that someone else is leasing a property is not the municipality's indaba. "Arrangements between private parties for accommodation are not for the municipality to get involved in," said Du Plessis. "The arrears are deducted from the prepaid meter registered to the property, regardless of who lives on the property."
Keep the lights on, pay your land tax. Photo: Pexels
Check your contract
With this information at hand, the next logical question would be: who is paying the basic services (landlord/lessee) and what does your lease say?
George Herald asked a property expert, Adelle Myburgh of HomeSeller, a local real estate company, for some advice and tips on the matter.
"A lease must be detailed. A basic contract is never sufficient to properly protect both parties," Myburgh says. "The landlord must be thorough in drafting it and the tenant must take a day to familiarise him/herself with what the contract entails and ensure that his/her rights are also protected before he/she signs.
"Both must familiarise themselves with the local city council's requirements, just as they must familiarise themselves with eg, estate rules, if they were to rent a property in an estate. Just a reference to the legislation is sufficient and it does not need to be repeated in the contract.
"Ignorance is never a defence. The tenant and landlord can obtain professional advice (from a local real estate agent who is very active in the area or a lawyer) should it be a private contract.
"It must be clearly stated who (tenant and landlord) pays the city council's service fees and by what date. The landlord is responsible for property tax and the tenant for all other basic services.
"The contract must be fulfilled promptly, therefore also the payment dates. Know your rights. Compensation and consequences for non-compliance must be discussed in advance and set out in the contract should one party fail to comply with any of the provisions of the contract, including the municipal obligations."
The latest policy says:
The following abstract is taken from the latest Customer Care, Credit Collection and Debt Collection policy as approved by Council on 30 May 2023.
Arrangements for settlements
i. All consumers with electricity and water in arrears shall be converted to prepaid meters and flow restrictors. The costs to install such meters will be for the account of the consumer.
ii. Installation of prepaid meters and flow restrictors are free of charge if the customer/consumer is indigent.
iii. When a pre-paid meter is installed due to defaults on payments, the arrears can be collected.
- monthly over an agreed period; or
- by adding the debt as a surcharge to the prepaid electricity cost and be repaid by allocating up to 50% with each purchase of electricity until the debt is fully recovered.
- The below sliding scale may be applied at the discretion of the municipality regarding the allocation of arrear debt:
- 10% of arrears 30 days outstanding
- 20% of arrears 60 days outstanding
- 30% of arrears 90 days outstanding
- 50% of arrears more than 90 days outstanding.
iv. The municipality reserves the right to raise the deposit requirement of customers who seek arrangements
v. In terms of the one account policy, an owner must grant permission for the occupier before an arrangement can be made with the occupier. If an occupier defaults or does not pay, the owner remains liable for the debt.
vi. Where an occupier's account becomes overdue, the municipality may consolidate that account with the owner's account.
vii. Where an arrangement is made outside of the conditions of payment as set out in Annexure "A", such payments will be accepted, subject to the normal credit control and debt collection procedures.
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