Prepaid Electricity Meters solve landlords headache

Source: Temporary or Private Prepaid Electricity Meters solve landlord headaches

The pressure on landlords with regards to controlling electricity consumption by tenants increases every day. Landlords could be ultimately held responsible for the consumption of electricity on their properties and this opens them up to abuse by an errant tenant.

A number of solutions are available to landlords:

1. Invoice the tenant, in arrears, for electricity consumption
2. Charge a tenant a fixed rate, in advance, for electricity consumption
3. Install a municipal prepaid meter on a rented property
4. Install a private prepaid electricity meter

The pros and cons of the above are as follows:

Invoicing the tenant in arrears introduces the twin expense of having to read and administer the billing. The landlord also runs the risk of the tenant not being able to pay the bill and the accompanying collections headache. If the landlord and tenant have a good working relationship then this method is probably the fairest one.

Charging the tenant a fixed rate could be good for either the tenant or the landlord with regards to consumption. At least the landlord will receive payment upfront. Inevitably though the monthly charge is not adjusted timeously, a cold spell or errant tenant pushes up the consumption considerably and the landlord reacts in an unfavourable fashion.

A municipal prepaid meter offers a better solution for a property that has only one tenant. You will need to go in person to a municipal office to apply for a prepaid electricity meter. Once the necessary paperwork is done, fees paid and application approved, you will have to wait for the meter to be installed by the municipality. This can take anywhere from 6 weeks to 6 months. If you want to split your meters – i.e. add another meter/s for one or more flatlets on your property you may well be refused or have to submit approved plans. Why? Splitting the supply reduces the consumption and consequently the money collected by the municipality as we pay a higher rate the more we consume (see NMB electricity tariffs at the bottom of this article), also the municipality needs to check if your flatlet is legitimate and you may face higher rates as a result.

Private prepaid electricity meters offer a solution for the landlord with a granny flat on the property or for sectional title complexes with bulk supply that wish to fairly apportion the electricity bill amongst residents/owners. Most private prepaid electricity meters can be installed with little or no change to circuits. If a landlord is looking to use a private prepaid meter then the quickest and easiest path to doing so is to check if:

1. The entire area that is to be controlled by a private meter can be switched off by one circuit breaker on the main distribution board (normally marked as ‘flatlet’ or ‘outbuildings’)
2. The flatlet has a sub distribution board with an Earth Leakage
3. No common circuits are used between the main building and flatlet
4. The flatlet has it’s own geyser – i.e does not share a hot water pipe with the main house.

If all of the above apply then the installation is a simple and cheap procedure. If not then a quote from your electrician will reveal further expenses.

The landlord then has a number of choices of meter installation ranging from an all in one meter to various anti-tamper versions. In terms of the NERSA rulings a landlord may recover all reasonable costs with regards to electricity consumption by a tenant.

The costs applicable in terms of a private prepaid electricity meter include:

1. Payment processing fees (tenant pays payment processor – like EasyPay, payment processor pays private metering company and then private metering company pays landlord),
2. Monitoring of consumption by private metering company,
3. Administration of landlords collection amount per kWh (on an annual or ad hoc basis) and
4. A small commission fee.

These amounts range from 10% to 18% and differ between Private Electricity Metering Companies. Naturally the free prepaid meters on offer attract a larger commission in order for the company to recover their costs of supplying and installing the meters. Be wary of companies charging more than 10% as an admin fee.

Of course if you require a temporary electricity metering solution then the product below might be the one:

The electricity charges charges to Non ATTP domestic consumers in Nelson Mandela Bay for 2017/18 are:

• 0 – 350 kWh: 130.30 c/kWh
• 350 – 600 kWh: 157.25 c/kWh
• 600 – 900 kWh: 173.97 c/kWh
• 900+ kWh: 180.68 c/kWh

Source: Straton Electrical