Landlord is liable for rates

2010-12-02 10:23

The municipal debt for electricity and water remains the responsibility of the property owner – even if the account is registered in a tenant’s name.

An Eastern Cape home-owner learned this the hard way after losing his property as a result of an unsettled municipal bill.

Thembani Solani of King William’s Town rented out his property to a tenant when he relocated to ­another province. It was agreed that the tenant would pay the rates and taxes.

Solani had taken a home loan ­account with Nedbank in 1992 and continued to make monthly repayments until he noticed that the deductions had stopped in 2006, a few months before he was scheduled to have ­finished paying for the house.

Solani later discovered that his property had been attached because the account had fallen into arrears, as his tenant had not paid. Solani was unaware of the developments because all municipal communications were sent to his King William’s Town address, and the tenant did not pass it on to him.

Since then, he has been waiting for an explanation from the Buffalo City Municipality and Nedbank about what happened to his property.

Miyelani Shikwambana, a?Nedbank spokesperson, said the property was sold to a third party at a sale in execution initiated by the Buffalo­­­ ­City Municipality.

Samkelo Ngwenya, the municipality spokesperson, said he could not ­attend to our enquiry because he was off sick.

A lawyer has advised home-owners to make arrangements to settle outstanding rates as soon as they become aware of the situation to avoid exposing themselves to similar risks. This should be done even if the owner wants to challenge the matter.

Making payment would enable the landlord to rent the premises to another tenant because the electricity would not have been cut off. Apart from recovering what is due to them, municipalities also cut off ­services to non-paying properties.

Prepaid, a company that offers solutions for pre-paid ­electricity and water metering, says landlords should take serious steps not to be saddled with debt from ­tenants.

Karen Wheller, a director at the company, says a property cannot be transferred unless municipal service fees, property taxes and rates or any other municipal taxes are not paid in full. The after-effects resulting from this are far-reaching at the levels of municipalities.

“We got some reports from customers that some municipalities had stopped opening accounts in the names of tenants.

“In our opinion this is a good idea, not only due to arrears, but also due to double accounts on some properties and general account mess.

“But for a landlord this means they are squarely responsible for the ­accounts. They will know when the account starts falling into arrears and they can start taking action before things get out of control,” said ­Wheller.

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