Pre-paid meters in sectional title schemes – a good idea or not?

While installing pre-paid meters or sub-meters mostly sound like a good idea, the reality is that many bodies corporate opt not to implement meters. The most common reasons include timing issues, the costs associated with the installation and the inconvenience to owners during the installation period.

Part 7 of the Sectional Titles Schemes Management Act Regulations deals with the physical management of a scheme and section 29 (3) deals with the matter of installing separate meters. The regulations stipulate that if separate meters are to be installed to measure the consumption of water, electricity, gas or any other service to each member`s section, exclusive use area and the common property, the body corporate can only do so via a resolution passed by the majority of members of the scheme (50% or more in PQ value – participation quota).

As the regulations do not say that it has to be a special or unanimous resolution, the resolution needs to be passed by the majority of scheme. The body corporate will normally pay for the installation and maintain the meters; then they recover the costs from the members.

The regulations make it very clear that the constitutional rights of occupiers may not be infringed under any circumstances to receive basic services such as water and electricity. In the event of a section being rented to tenants, the rights afforded to tenants in terms of the Rental Housing Act of 1999 may not be infringed. Water and electricity supply to units may not be disconnected for any reason, even non-payment of levies – or rentals in the case of tenants.

Section 29 (4) deals with the installation of pre-paid meters. If a scheme needs to install pre-paid meters, a special resolution of the members in the scheme must be passed in order for the body corporate to proceed with any installations. In terms of the voting requirements, 75% of the required quorum must be achieved in participation quota (75%) and in number of sections.

60 Days’ notice must be given in writing prior to the installation of pre-paid meters and not the normal 30 days required in the case of a normal special general meeting. The regulations also require an explanation of the impact of such services supplied ensuing three years.

The advantages of installing separate meters or pre-paid meters are:

  • Occupiers are directly responsible for the consumption of services in their units;
  • Other members of the scheme do not have to pay inflated levies resulting from any abuse of service by some scheme occupiers;
  • Levies are drastically reduced because provision does not have to be made for excessive costs due to usage of services;
  • Bodies corporate and individual owners do not run the risk of tenants not paying for water and electricity supplied as the tenants pay upfront for however much they use.

The disadvantages of installing separate or pre-paid meters:

  • The initial cost of installing meters;
  • The inconvenience to residents during the installation period;
  • The practicality of installing such meters. Not all buildings are suitable for the type of meters, especially older buildings. This may increase the cost of meter installation.

 

 

Author: Leigh Maingard – MD Stonewood Properties

Stonewood Properties is a professional property management company that specialises in administrating community schemes in Johannesburg and Cape Town. www.stonewoodproperties.co.za