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Prepaid electricity meters can save you money

Installing prepaid electricity meters can save you money #MumbiStrategy

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With many rental properties, there are no prepaid water and electricity meters, and the landlord will receive the accounts for these each month for payment by the tenant renting from him. 

Cawood says the first thing that should be considered is the possibility of installing prepaid meters, as these will place responsibility for payment of the services in the hands of the tenant.

This is according to Gail Cawood, rentals manager at Knight Frank Residential SA, who says if the tenant falls into arrears with one or both of these accounts, the landlord must act immediately and not allow the sums to build up over any period of time, nor should he have to pay these bills on behalf of the tenant.

Cawood says the first thing that should be considered is the possibility of installing prepaid meters, as these will place responsibility for payment of the services in the hands of the tenant, rather than enabling him to use as much as he’d like without any guarantee that he will pay in full every month.

This also encourages responsible use, as the tenant will see what he consumes and can budget accordingly.

The cost of installing a prepaid meter is in the region of R1 500 per meter, and the services are then bought through a vendor by the tenant, which immediately clears the landlord of any responsibility of handling these accounts.

If the installation of prepaid meters is not possible, the landlord should monitor the bills and payments carefully. As soon as there is any shortfall in payments from the tenant, the landlord should send him notice giving him 20 days to remedy the breach.

If he or she does not pay the outstanding amount in full, it is grounds to cancel the lease as there is a breach of contract and legal proceedings can begin.

Cawood says lawyers will also need to give 20 days’ notice, so the sooner the process of warning the tenant starts, the better.

“If the landlord leaves the bills unpaid and the tenant’s services are cut off, this could be problematical for the landlord as the services are in his name and he is ultimately responsible for the payments,” says Cawood.

“The best thing to do in all situations when things start to go wrong is to be proactive in sending warnings to the tenant to the effect that they are in breach of their contract.”

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Source: http://www.property24.com/articles/installing-prepaid-meters-can-save-landlords-money/22445


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