Question:
I am the owner of a property, and the Municipality provided me with a statement of account in which certain costs were added to the account that should not have been reflected on the account or that were incorrectly added to my account. I have lodged a dispute at the Municipality for the said amounts, the dispute is still pending. The Municipality threatens to disconnect my electricity supply due to non-payment of the disputed account. Is this a legal process for the Municipality to follow?
Answer:
Municipalities in South Africa are often referred to as “creatures of statute”, which means that they are established and regulated by legislation. Municipalities are not formally registered as companies or trusts. Thus, Municipalities must adhere to the terms of the legislation from which they are established and perform their functions according to the guidelines of the legislation.
One of the important statutes that regulates Municipalities is the Local Government: Municipal Systems Act 32 of 2000. In terms of this Act, the Municipality is provided with certain rights and responsibilities of which one of the responsibilities is to provide landowners with accurate statements of accounts, to provide landowners access to systems to query or verify accounts and metered consumption and to also provide for an appeal process which allows landowners to receive prompt assistance for inaccurate accounts.
The Act further provides Municipalities with the responsibility for debt collection and the Municipality therefore has the authority to consolidate any separate accounts of a landowner into one account, to utilise any credit that an owner has on one account for arrear amounts on another account and to implement any debt collection and credit control measures provided for in legislation with regards to any arrear amounts. It is important to note that the latter processes may not be implemented by the Municipality if there is a dispute between the landowner and the Municipality concerning any specific amount charged by the Municipality. To give effect to the rights and responsibilities provided to municipalities in the Act, they have to adopt By-laws to regulate their credit control and debt collection processes.
The question with regards to whether the Municipality may threaten to cut the electricity supply to property while a dispute is pending between the Municipality and the landowner has been decided in a recent Supreme Court of Appeal case. The court looked at the abovementioned rights and responsibilities of the Municipality while scrutinising the policy of the Municipality concerning the credit control measures of the Municipality. The Municipality’s policy stated that when a landowner is in arrears with its account the landowner is notified of its arrears and provided with 14 days to rectify this and should the landowner not respond within the time, then the electricity supply may be disconnected.
The court also noted that the policy of the municipality also provided for the process to lodge a dispute, and the appeal process should the landowner not agree with the outcome of the dispute, which process also included that the Municipality must investigate the dispute and that only certain officials have the authority to give the final decision on the disputes.
The court concluded that the Municipality did not comply with the terms of its policy in that when the landowner lodged his dispute, a mere email was sent by an employee of the Municipality to the landowner confirming an outcome. This email did not include any indication as to whether the municipal employee had the necessary capacity to confirm the outcome of the dispute. The Municipality also did not institute a proper investigation into the dispute of the landowner, nor did they allow him the time to appeal the decision to the City Manager. The landowner on the day of submission of his appeal, received a telephone call from a municipal employee confirming that the electricity would be cut off within 3 days should payment not be made, thus again the municipality did not follow its policy. The court therefore provided an order in favour of the landowner and also noted that the Act clearly states that until a final decision resolving the dispute between the parties was given, the municipality may not disconnect any supply of electricity.
It’s important to remember that the Appeal Court ruling does not grant landowners the ability to dispute accounts indiscriminately; there must be a valid reason for such disputes. Additionally, each case should be decided based on its specific facts. If you find yourself in a dispute, it’s crucial to understand your municipality’s policies and by-laws concerning the supply of services and billing practices. The PH Attorneys Property Team can assist you with any queries or disputes in this regard.
Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy has been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s).
