Why prepaid meters are preferable in sectional title schemes

Why prepaid meters are preferable in sectional title schemes

There’s no doubt that the best way to manage the costs of services such as water and electricity in sectional title schemes is by having separate meters installed for each unit.

This is according to Mandi Hanekom, operations manager of sectional title finance company Propell Even, who says better would be to have prepaid meters for these services, as owners only use what they pay for.

In many sectional title schemes, the municipal costs can be very high, and there will always be a certain percentage of non- or late-payers. If prepaid meters are installed, it makes the management of the defaulters’ debts easier to control.

Hanekom says prepaid meter installations, however, need a special resolution to be passed, whereas separate meter installations only require ordinary resolution.

The Management Rules contained in the Regulations to the Sectional Title Schemes Management Act (STSMA) provides a clear guide as to how trustees and owners should go about tackling such a project.

Section 29 of the Management Rules provides that:

“(3) A body corporate must, if so directed by a resolution of members -

- (a) install and maintain separate meters to measure the supply of electricity; water, gas or the supply of any other service to each member's sections and exclusive use areas and to the common property; and

- (b) recover from members the cost of such supplies to sections and exclusive use areas based on the metered supply.

(4) A body corporate may on the authority of a special resolution install separate prepayment meters on the common property to control the supply of water or electricity to a section or exclusive use area; provided that all members and occupiers of sections must be given at least 60 days’ notice of the proposed resolution with details of all costs associated with the installation of the prepayment system and its estimated effect on the cost of the services over the next three years.”

“Installing separate meters can be paid for through project finance, if there aren’t already sufficient funds in the body corporate’s account, to assist managing agents and trustees get the job done with minimum fuss and without having any of the trustees sign surety for the loan,” says Hanekom.

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