‘Ruthless’ body corporate accused of ‘bankrupting’ Joburg complex residents

Owners at a Lyndhurst sectional title complex have accused their body corporate of overcharging residents into financial ruin when it comes to utilities.

This as a property company claims at least one of the residents is being overcharged, according to its analysis.

Despite numerous complaints to The Rose body corporate’s board of trustees, residents say they spent years being charged exorbitant water rates without meters, which were only recently installed this year.

Even so, bills are still running into their thousands every month, ostensibly because the body corporate makes owners pay for tenants who rent the outside units in the complex where constant leaking and other issues are threatening to devalue the property.

A person living alone in a three-bedroom apartment can expect to pay as much as R1,300 for water and about the same for electricity, it’s been alleged.

The body corporate has denied there was an issue with its billing structure, and instead blames residents who refuse to pay their bills for the problems facing the complex.

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A former unit owner, 37-year-old Jacques le Roux*, says he ended up selling his property at a loss after years of facing steep water and electricity bills, which would accumulate interest and penalties to a point where his utilities bill was worth nearly half his monthly bond payment.

He says the body corporate would threaten litigation every time he tried to challenge his bill and eventually Le Roux could no longer take the heat and resolved to sell the property and leave. Residents claim there are several others like Le Roux, who have opted to sell after dealing with inexplicably large sums of money being charged for monthly utilities.

“In my opinion the rates are quite steep. I think in my instance if I can recall I was paying R3,250, which was half my bond for the value of the property. As a result, I ended up falling behind with the payment and it accumulated together with interest to a five-digit number,” says Le Roux.

“My household items were attached and luckily I was able to retrieve them with negotiations and partial settlement to the body corporate. I ended up selling the property.”

Cut off

Now a current resident is afraid she will be the next resident who will have to sell her home. Sarah Baker* has been without electricity for weeks, after she failed to pay her mounting utility bills.

Documents she sent to The Citizen indicate that her services have been cut off until she is able to settle her debt.

However, she feels she has been unfairly charged for services. She lives in a three-bedroom apartment with two children aged 12 and 19.

She thought she was the only one being billed nearly twice the expected amount for utilities, until she realised her neighbour who lives alone in a one-bedroom apartment is paying nearly the same amounts.

Tshepang Mathole* ,27, says his two-bedroom apartment is barely occupied during the week, as he spends half the week at his girlfriend’s place. Despite this, his last bill included R700 for water, another R700 for sewage and over R1,000 for electricity.

Residents suspect that the higher amounts they have been paying are a result of the body corporate paying for the electricity used in the rental units by overcharging unit owners in the complex.

A property company which analysed one of Baker’s bills came to the same conclusion. Falas Property Investments was approached by Baker to determine whether she was being overcharged. Company director, Ronald Sefalafala, says according to his analysis, the body corporate is being billed less than it is charging residents for utilities per measuring unit of water and electricity.

In emails seen by The Citizen, Sefalafala tells Baker she is being overcharged for electricity.

“The municipality charges the body corporate based on a residential three phase (<=80A) tariff of 1,4242 per unit consumed. The body corporate charges (Baker’s) electricity based on a 2.25 per unit. This is an overcharge as they are not supposed to be making a profit from electricity.”

Complaining residents created their own problems, say trustees

But the body corporate has denied trying to profit off residents’ utility bills and says it pays the exact amount the municipality charges to the property and charges residents according to the consumption of each unit.

Baker even tried taking the matter to the Community Scheme Ombud Service (CSOS), which was formed in 2016 to deal with disputes between trustees of sectional titles and owners. She says she hasn’t received any assistance yet.

CSOS spokesperson Doniah Motsoeneng says she cannot comment on the complaint sent to them about The Rose until it has completed its investigation. But the body corporate is confident this complaint has gone nowhere.

“The CSOS, which is responsible for setting the rules governing sectional title schemes and arbitrating in disputes such as these was also approached and fed false (information) by the source. They too have stopped upon learning the truth.”

The body’s trustees’ attorneys have all the evidence to “support the above-mentioned”, it claims.

It says The Rose pays over to City Power what the utility charges for electricity and sanitation services.

“The Rose does not make any profit from municipal charges, as alleged by your source. Our levies get decided by the owners of the properties themselves when they approve the budget annually in an Annual General Meeting, in terms of the law,” trustees say in a joint written response to The Citizen.

“Your source(s) also vote in the trustees at the said AGM without fail. The trustees pay the same tariffs City of Johannesburg increases rates for both electrify and sanitation every year which consequently increases our bills.”

The body corporate also claims that a disgruntled resident has previously complained to the media as well as members of “a certain political party” who recently entered the premises threatening trustee members. It says the resident is simply using various tactics to avoid paying their debt.

What the law says

According to the CSOS, different rules apply for rates charged for common property use and individual units. For individual units without meters, the body corporate will receive a bulk bill from the municipality and individual units will be charged in accordance with their participation quota.

This is linked to the size of the unit and not the actual consumption.

“The rates paid would be as per the municipal bill, charged to owners in accordance with their participation quota or equally per the approved governance documentation.”

With meters, the Prescribed Management Rules (PMR) makes provision for the installation of separate water/electricity meters. In compliance with PMR 29, the body corporate must recover costs from members in accordance with the PMR.

In 2015, the South Gauteng High Court confirmed that landlords are not entitled to profit from providing electricity to their tenants. This was after a landlord’s failed bid to set aside the ruling of the Gauteng Rental Housing Tribunal in a complaint dealing with unfair electricity service charges levied at a building in Hillbrow.

City Power spokesperson Isaac Mangena says the city does not intervene in allegations of overcharging.

“City Power is not responsible for how body corporates charge tenants. We have in the past requested tenants to raise their issues with Gauteng Rental Tribunal or directly with Nersa [National Energy Regulator of South Africa].”

simnikiweh@citizen.co.za