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Can property owners cut tenant’s electricity?

Can property owners cut tenant’s electricity? This is a question every landlord asks when dealing with a terrible tenant #MumbiInvestments

On 14 April 2015, the Western Cape Division of the High Court handed down judgment in a matter, which caused a great stir in the property industry.  In this matter the court granted an order authorising the property owner to terminate the electricity supply to the premises, occupied by the respondent.

It is of utmost importance to emphasise that this judgment does not provide a property owner with the right to disconnect utility supplies to a property due to non-payment of utilities or any other charges, without a court order.

It is of utmost importance to emphasise that this judgment does not provide a property owner with the right to disconnect utility supplies to a property due to non-payment of utilities or any other charges, without a court order.

The position regarding spoliation was not changed by this judgment, on the contrary Judge Schippers specifically mentioned that it was necessary for the applicant to bring the application by stating: “The applicant, however, cannot take the law into its own hands by simply cutting off the respondent’s power supply, hence this application.”

The applicant in this matter is Anva Properties CC, the owner of the property situated at 34-36 Riebeeck Street, Cape Town.  The respondent, End Street Entertainment Enterprises CC is an occupant in this building owned by the applicant. The respondent was deregistered in 2008, whereas the lease agreement was only concluded in 2012. This fact was raised as a defence by the respondent to dispute the validity of the lease agreement. A further defence was raised by the respondent stating the applicant does not have the right to collect debt from the respondent, since all the rights of the applicant were ceded to Nedbank Limited.

The Court , however, decided not to delve into these defences during the argument at hand, being the application to obtain a court order to allow the applicant to disconnect the electricity supply to the respondent. The reason for this is that the defences raised by the respondent only relate to the applicant’s right to claim debts from the respondent; debt collection was not the case before Court.

The building in question is occupied by multiple tenants. The respondent had not paid their electricity bill since September 2014, and at the time of handing down the judgment the arrears were in the excess of R300 000. The applicant was in a position where it effectively subsidised the business of the respondent, during the period of non-payment.

If the applicant merely ceased payment of the electricity account to the City of Cape Town, the electricity supply to the entire building would be disconnected, leaving other tenants without electricity. The applicant clearly had no choice but to bring this application to obtain an order to be placed in a position to mitigate its damages.

A party suffering damages is always required to mitigate its damages, however, it should always be kept in mind that no person is allowed to take the law into her own hands.

This judgment does give owners a basis to bring an application to request an order to disconnect the utility supply to their property, if the occupant fails to pay the utility charges. However, such an application would be similar to an eviction application, in the sense that only a court can grant an order such as this.

The reason being, this remedy is provided for in law to place the owner in a position to enforce the rights he has to his property.

Since a similar process to an eviction application would be followed in a matter like this, the costs and time frame would be similar.

This judgment should not be seen as a replacement of, or an alternative to an eviction application.  In certain circumstances, it could be a powerful tool in the hands of the owner to combine these applications. – Cilna Steyn

About the Author

Cilna Steyn

Cilna Steyn obtained her LLB Degree from the University of South Africa in 2007. She is an admitted attorney with right of appearance in the High Court. As co-founding partner of the property litigation firm Steyn & Steyn Attorneys in 2008, Cilna started specialising in Eviction Law from the outset. Recently, the firm was incorporated and currently practise as SSLR Incorporated, with Cilna as one of its directors. She heads up the department handling evictions, collection and dispute resolution in commercial, retail and industrial properties.

Source: www.property24.com


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