16 April 2015

High Court decision good news for landlords - Judgment Authorising Landlord to Cut Off Electricity

An as yet unreported judgment dealing with a landlord's obligation to pay for electricity (to the City of Cape Town) in circumstances where the tenant is not paying or reimbursing the landlord for such electricity, was granted in the Western Cape High Court on Tuesday 14 April 2014. 

According to Grant Ford, Director and Cape Regional Dispute Resolution Practice Head at  Cliffe Dekker Hofmeyr,  the judgment, Anva Properties CC vs End Street Entertainment Enterprises CC, will be of particular interest to landlords who have long had to endure the uncertainty of knowing what their rights are in such circumstances.

"The case concerned a respondent who was not paying their electricity bill, with the onus then falling  on the landlord to do so. The argument presented by the landlord was that it was effectively subsidising the respondent's business at its own cost and expense," Ford explains. 

"Historically, the cutting of the electricity supply by the landlord in such circumstances resulted in some cases in tenants bringing claims for spoliation (unlawful dispossession) and damages against the landlord or using these claims as counterclaims in legal proceedings instituted by the landlord against them.  landlords may not take the law into their own hands so this issue has remained problematic. Landlords will thus be pleased to note that in this case the Court had no hesitation in authorising the landlord to terminate the supply of electricity to the tenant,  also thereby mitigating its damages in the process.

"Landlords should take note of this case for potential future disputes with tenants pertaining to non-payment for the costs of utilities and services," Ford adds.

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