By Anton Kelly
Anton KellyOne of the major financial problems encountered by many sectional titles schemes these days is the recovery of services costs. Quite simply, owners and tenants just don’t pay their electricity and water bills. The problem that schemes encounter is that widespread non-payment can lead to huge outstanding accounts that can only be paid by raising a special levy, which is equally likely to be difficult to recover, and in any case would prejudice owners and tenants who have paid their service bills.

Sectional title schemes contract with the local municipality for the supply of water and with the municipality or Eskom for electricity. The scheme then charges each owner for the service, usually based on readings from individual meters but in older schemes without separate meters, according to the participation quota. Newer schemes, particularly in Cape Town, where a policy for their installation in new residential applications has been implemented since 2006, have pre-paid electricity meters installed when they are built. The problem does not exist in these schemes.
Schemes are not entitled to cut off services for non-payment of bills because the scheme is not the supplier. Only the service supplier – the local municipality or Eskom – is entitled to cut off the supply. The seemingly obvious answer to the problem is to install pre-paid electricity and water meters for each section.

There are now many private suppliers of prepaid meters aside from local municipalities like Cape Town. They contract with schemes that have bulk meters, install the pre-paid meters, and the end users pay a rental for them. They buy tokens from a designated supplier, the third party vendor. The third-party vendor provides and maintains the prepayment facilities and software and passes on the money collected from the end users, less a service fee of course, to the body corporate. The body corporate then pays the municipal bill for the bulk supply. The 6kl of free water the scheme gets from the local municipality for each household is pre-programmed into each meter.

Having prepaid meters for the supply of water and electricity seems the obvious answer to the problem of non-payment but there are various areas of difficulty to this solution.

Prescribed management rule 33(3) entitles owners in a sectional title scheme to require the trustees to install separate meters to measure each section’s consumption of electricity, water and gas. Only a simple majority of owners is required but the request must be made in writing. The trustees are not entitled to make this decision by themselves. However, this provision pre-supposes that the separate metering is internal and that the service is supplied in bulk to the scheme by the municipality or Eskom and the meters will be used by the body corporate to establish a charge for services actually used by each owner. It does not apply to the installation of pre-paid meters.

Because owners have bought their units in a scheme with an existing system for charging for services, changing that system would be a fundamental change to the nature of the scheme and our view is that all owners would have to agree to this change. An additional problem is tenants, who have contracted to lease premises under certain service payment conditions and they would have to agree to that change before a landlord could make it. Owners with tenanted sections would probably only be able to install prepaid meters between tenancies or with the written agreement of their tenants.

Both Cape Town City and the Gauteng prepaid meter suppliers consulted during the preparation of this article say that, although it is possible in theory to provide prepaid meters to only some of the sections in a scheme, it is not practicable. This means that the whole scheme would have to be converted. Most schemes require extensive rewiring and re-plumbing for the installation of separate meters.

There are two areas of cost that have to be considered, the installation and rental cost, and the service fee charged by the third-party vendors.
The installation of the meters is likely to be a major cost due to the rewiring and re-plumbing. The scheme would have to pay these costs directly, whether the local municipality or a private supplier installs the meters.  Consumers usually have to buy the meters from the municipality’s supplier but private suppliers usually charge a rental for the meters.

Constitutional right to access to water
Where electricity and water are supplied through pre-paid meters, it is up to the end user to feed that meter, otherwise, the service is automatically cut off. In the case of water meters, this is contrary to the provision of the Constitution that states that everyone has a right to access to water, which is necessary for life. In order to comply with this requirement, schemes would have to supply a reasonably accessible source of water on the premises.

There’s no doubt that prepaid metering will eventually become the norm but for the near future bodies, corporate should concentrate on establishing a culture of payment for services among its members. The Sectional Titles Act and rules provide for the body corporate to use the courts or arbitration to recover arrears. Although initially expensive, perhaps a zealous application of these methods would help establish the necessary culture of prompt payment.

Article reference: Paddocks Press: Volume 8, Issue 8, Page 3
Anton Kelly is the course instructor for the UCT Scheme Manager – Sectional Title short course. For more information please contact Timothy on 021 686 3950 or


  • anton badenhorst
    09/03/2016 09:47

    Morning Sir
    You are talking about Pre paid meters . If i understand you correct Rule 33 is not applicable and every owner must give concent. Does this also apply to normal individual water meters where we still have to calculate the individual usage or only pre paid meters .

    • Paddocks
      23/03/2016 11:34

      Hi Anton,

      Thanks for your question. Prescribed management rule 33(3) provides for the installation of separate meters for each section and the common property. If there are no separate meters in a scheme, the majority of owners may make a written request to have them installed and maintained at the expense of the body corporate. This rule does not apply to pre-paid meters of any kind.

      Separate meters allows the body corporate to calculate the actual usage of each section as well as the common property, and so to charge each owner for their use. The common property use would be included in the levy. PMR 33(4) says that if there are no separate meters, the owners must be charged according to the PQ or a rule made in terms of section 32(4).


  • Good day,

    Is this still relevant today after all the amendments to the act?


  • Tallula Esterhuizen
    23/11/2017 20:43

    Who do the meters/electrical boxes belong to? Both for the whole building and per unit? The municipality, the owner or the building? Who maintains them?
    Best, Lulu

  • My electricity was in arrears due to unforseen circumstances. I have caught up the sun in less than a week. The trustees and managing agent said I had to pay as soon as possible. I confirmed by the end of the week. Unfortunately due to public holidays it has been 7 days not 5. I have just been informed that they will install a pre paid meter at my cost. Can they do this?

    • Paddocks
      17/08/2018 09:01

      Hi Dawn,

      Thank you for your comment. We would love to help, however we do not give free advice. Here’s how we can help:

      – We offer a 1-week Free Basics of Sectional Title short course.
      – We offer consulting via telephone for R490 for 10 minutes. Please call us on 021 686 3950.
      – We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes.

      Kind regards,

  • In a new complex if there is no meter inside the unit for power as is usually seen – but the developer advises that he has a prepaid unit- how is this possible – how is he going to calculate individual usage. Does that mean he calculates average for each individual which i think is unfair.

  • Lindiwe Marepula
    23/12/2019 21:49

    The majority of the owners are complaining about the irregularities in electricity metre readings by a Chairperson who is a bully and who is not keen for prepaid metre installation.
    How can this be resolved?

    • Paddocks
      10/01/2020 09:11

      Hi Lindiwe,

      Thank you for your comment. However, we do not provide free advice. Please email us on with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,