Pre-Paid Meters

Installing pre-paid meters

Installing pre-paid meters

A Legal Opinion

  1. I have been requested to give an opinion on the legality of installing pre-paid meters in Bodies Corporate.
  2. For the purpose of this opinion I assume that the Standard Management Rules apply and insofar as references are made to rules in this opinion, it is to the Standard Management Rules.
  3. Rule 33(4) provides that, unless separate meters have been installed, the contribution payable by each owner in respect of electricity, water and gas has to be calculated in accordance with the provisions of rule 31, which refers to participation quotas.
  4. An exception is, however, created in rule 33(3) in terms of which the trustees shall, if so required in writing by a majority of owners, procure the installation and maintenance in good working order, at the cost of the body corporate, of separate meters to record the consumption of electricity, water and gas in respect of each individual section and of the common property.
  5. This Rule is regarded as an exception to the restriction on trustees to make improvements to the common property.
  6. In such instance the participation quota falls away and the liability of an owner will be as per the consumption.
  7. I would submit that rule 33(3) is couched in such manner that it places an obligation on the trustees, once the majority of owners have so required in writing, to install meters, without further ado and as provided for in the rule. This does not necessarily mean that this is the only procedure to adopt for the installation of meters.
  8. Nothing prohibits the members in general or special meeting to adopt a special resolution to this effect or the Trustees at a duly constituted meeting, as long as all the requirements pertaining to notice and quorum have been complied with and as long as the procedure set out hereunder has been complied with.
  9. This means that should the trustees wish to install meters, without the written request of a majority of the owners (as described in rule 33(3)) and as revered to in paragraph 4 above, they will have to pass a valid resolution to install meters and follow the procedures set out in rule 33 (2) which are the following:
    1. They (the trustees) will have to give written notice of such intention to all the owners and such notice shall-
      1. indicate the intention of the trustees to proceed with the installation of meters upon the expiry of a period of not less than thirty days reckoned from the date of posting such notice; and
      2. provide details with regard to the following -
        1. the costs thereof;
        2. the manner in which it is to be financed and the effect upon levies paid by owners; and
        3. the need, desirability and effect thereof.
      3. The trustees shall, at the written request of any owner convene a special general meeting in order to discuss and to deliberate upon the proposals contained in the notice referred to above, at which meeting the owners may approve, with or without amendments, such proposals byway of special resolution.
      4. In the event of such a special general meeting being called, the trustees shall not proceed with their proposals until the holding of such meeting, whereupon they shall be bound by any special resolution ensuing there from.
      Insofar as pre-paid water meters is concerned the issue has also now been resolved by our courts
  10. In the matter of Mazibuko and Others v City of Johannesburg and Others 2010 (4) SA 1 (CC), the Constitutional Court was asked for the first time to interpret the provision contained in s 27(1)(b) of the Constitution insofar as pre-paid water meters were concerned. It (section 27(1) (b)) provides that everyone has the right to have access to sufficient water.
  11. The Constitutional Court found that the installation of prepaid water meters by a municipality was not unlawful and even if it occurred against the wish of the owners in question.
  12. The argument presented by the owners in question was as follows: "....because prepaid meters halt the water supply to a resident, once the free basic water supply has been exhausted, until the resident purchases credit, they give rise to the unlawful and unreasonable discontinuation of the supply of water...."
  13. This argument was rejected by the Constitutional Court who found that water meters may be installed, even against the wishes of the owner in question as long as the free basic supply per month is not interrupted.
  14. In coming to the conclusion that it did the Court took cognisance of section 8(2) of the Systems Act which stipulates that: "a municipality has the right to do anything reasonably necessary for, or incidental to, the effective performance of its functions and the exercise of its powers".
  15. This provision not only echoes the language of section 156(5) of the Constitution, which likewise provides that municipalities have the right to exercise any power reasonably necessary for, or incidental to, the effective performance of their functions but it also echoes section 38(j) of the Sectional Titles Act which gives the Body Corporate the right to do all things reasonably necessary for the enforcement of the rules and for the control, management and administration of the common property and rule 30 which obliges the Trustees to levy and collect contributions from the owners in accordance with the provisions.
  16. It can be argued that the power to install prepaid meters is one which is reasonably incidental to the provision of services to its members by a Body Corporate.
  17. The installation of prepaid meters does not result in unauthorised discontinuation of water supply and cannot be regarded as unlawful as long as does not result in a person being denied access to the monthly free basic water supply.
  18. The by laws and regulations of the City of Johannesburg and the cases dealing with unlawful disconnection of water are not concerned with the suspension of water supply when a customer needs to purchase more credit to maintain the water supply through a prepaid meter.
  19. The ordinary meaning of 'discontinuation' is that something is made to cease to exist. When installing pre paid meters the water supply does not cease to exist when a prepaid meter temporarily stops the supply of water. It is suspended until either the member purchases further credit or the new month commences with a new monthly basic water supply, whereupon the water supply recommences. It is better understood as a temporary suspension in supply, not a discontinuation.
  20. Accordingly, I conclude that there is no impediment on installing water or electricity meters, as long as the proper procedures have been followed.

Christo Sutherland