Tenant not paying for electricity consumption charges

Tenant not paying for electricity consumption charges

SAPOA Updates

2015-05-18

ANVA PROPERTIES CC V END STREET ENTERTAINMENT ENTERPRISES CC

Landlords are always looking for legal ways to disconnect the electricity supply to the tenant not paying for electricity consumption charges.

On 14 April 2015, the Western Cape High Court in  Anva Properties CC v End Street Entertainment Enterprises CC (Anva), granted a judgment in favour of Anva Properties CC (Landlord) and held that the Landlord was authorised to terminate the supply of the electricity to the premises occupied by End Street Entertainment  Enterprises CC (Tenant).

In brief, the facts  of the Anva case are as follows:

The Landlord owned a building in Riebeeck Street, Cape Town and the Tenant was one of the tenants in occupation of the building. The Landlord paid its electricity consumption charges for the building to the City of Cape Town (City) and recovered the costs from the tenants. The Tenant had occupied the basement of the building since 2012, from where it conducted its business as a bar and nightclub.  The Tenant used electricity for its air-conditioning, refrigeration and lighting facilities and the Tenant had not paid its electricity bill since September 2014 and was in arrears in excess of R300 000. The Landlord was required to pay the City for all services rendered in the building including electricity and if the Landlord did not pay the City for its electricity, the City would cut the supply to the building, which would cause other tenants in the building to be without electricity. The effect of this was that the Landlord was subsidizing the Tenant’s business.

The Judge held that the  Landlord was authorised to terminate the supply of electricity to the premises that the Tenant occupied and granted an order that the Tenant must give the electrician, appointed by the Landlord, access to the premises in order to disconnect the electricity supply to the premises.

 The Anva case  is of particular interest to landlords as landlords are always seeking ways to lawfully terminate the supply of electricity to non-paying tenants. On reading this case, the first impression that is created is that this case may be ground breaking. However, on closer consideration of this case, it is clear that this case does not allow the landlord to terminate the supply of electricity without a court order. The principle emanating from this case is that if a landlord is supplying electricity to a non-paying tenant, the landlord may apply to court for an order to disconnect the supply. In the Anva case, it was an easy decision for the court to make as it was common cause that the Tenant had not paid for the electricity charges and the Tenant did not dispute the charges. 

The Anva case does not give landlords the right to take the law into their own hands and to terminate the supply of electricity to non-paying tenants without a court order.

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