By Chantelle Gladwin, Partner and Maike Gohl, Partner
Imagine that you own a building that you rent out. Imagine it is highjacked and the best lawyers in the country tell you it will take at least 2 years (or longer) to “rehabilitate”. You might be a Body Corporate in the same position. Or imagine that you are a property owner who has just discovered that your loyal tenant, the head of a large household of a lower income family, has just passed away due to COVID, and the family left behind has no income and nowhere to go. The best lawyers in the country tell you that it might take 2 years or longer to evict due to the situation that the country finds itself in. Are you expected to continue to “foot the bill” for the supply of water and electricity to the property and carry that liability, whilst the tenants or hijackers benefit from your loss, whilst you are trying your very best to move the machinery of the law along to evict/rid the property of hijackers?
This article examines the possibility of a landlord saving on water and electricity costs in the scenarios contemplated above by asking the court to cut off the supply to the property. This might occur in relation to electricity and/or water supply and/or gas supply to the property.
This kind of request is typically only controversial in circumstances where the owner is not the occupier of the property at the time that the request for disconnection is made. In order to discuss the legal issues at play when making such a request it is necessary to distinguish between two different scenarios: the first where the property is occupied by a tenant, and the second where the property is occupied unlawfully by squatters.
Laws That Protect Occupiers
If the occupier is a residential tenant and is lawfully occupying the property (i.e. is a tenant in occupation of the property with the permission of the landlord) then the Rental Housing Act will apply. This Act provides, in the regulations promulgated thereto, that it is unlawful for a landlord to restrict or terminate the supply of services such as electricity and water to the property, for any reason without an order of court (save that the landlord may, in certain circumstances, terminate or restrict the supply if it is necessary in order to carry out maintenance or repairs to the property). It is important to remember that this only protects occupiers who are in occupation of the property by virtue of a lease – with the consent of the owner – and only residential tenants. Our common law also recognises that residential tenants have the right to the supply of electricity and water at the property in terms of their use and occupation of the property granted in terms of the lease. This means that cutting off the supply to a residential tenant without that tenant’s consent is both a breach of the lease and constitutes the unlawful deprivation of a part of the tenant’s use of the property – known as spoliation.
The next important law to consider is an Act called PIE (The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act). PIE protects all occupiers of residential property, regardless of whether the occupier is there lawfully or not – in other words regardless of whether the occupier has the consent of the landlord to occupy the property in terms of a lease, or if the occupier is an illegal” squatter”. This Act provides that a person cannot be evicted from their home without an order of court that is just and equitable taking into account all of the relevant circumstances. This Act is based on sections 25 and 26 of the Constitution which also provide that no person may be evicted from their home without an order of court. PIE prescribes a relatively lengthy and costly procedure that must be followed by a landlord in order to lawfully obtain a court order evicting a tenant from a residential property. Both PIE and the RHA were created in order to give effect to the constitutional right to housing as enshrined in our Constitution.
It is important to remember that PIE (which relates to evictions) applies regardless of whether the occupier of the property is lawful or not, as does the Constitution. It is absolutely critical to the issue at hand to appreciate that PIE does not deal at all with the obligation of a landlord to supply services to a property, nor does it deal in any shape or form with the disconnection of those services. This is because the disconnection of services to a property is already regulated the Rental Housing Act and by the common law.
The common law provides that if a property owner or any other person unlawfully disconnects the supply of services to a property (and by unlawfully here, it is meant without a court order or without the consent of the occupier), this is unlawful and constitutes spoliation (the unlawful deprivation of the supply). This will entitle the occupier to obtain a court order to restore the supply of the services to the property immediately. Our law frowns on self–help, and equates it to vigilantism, and thus regards a landlord’s action in depriving the occupier of the supply of services without the occupier’s consent (or without a court order) as being unlawful – it doesn’t matter for the purposes of this enquiry whether the occupier is paying rent or not, because the law is only looking at the issue of whether the landlord acted without the consent of the occupier or a court order, when dealing with the deprivation. The object of the law that protects occupiers in this regard (called the Mandament van Spolie) is to restore the status quo (meaning to reinstate the supply as quickly as possible) and then allow the landlord and the occupier to properly ventilate the dispute that led to the disconnection of services before a court at a later date. The idea is that the landlord cannot be allowed to take the law into his own hands, deprive the occupier of the supply, and in that way force the occupier out before a court has actually dealt with the dispute between the parties – namely the eviction. The landlord can’t be permitted to find a “back door” to evict the occupier and thereby negate the purpose of the law that regulates how people are evicted.
Other Important Legal Considerations
1. If the occupier has a lease, then there is a contractual relationship (a lease) between the occupier and the landlord. If the occupier is not on the property with the landlord’s consent, then there is no contractual relationship between the occupier and the landlord. The terms of any lease might impact on the rights of both parties and will need to be taken into account.
2. There will always be a semi-statutory, semi- contractual relationship between the property owner and the municipality (even where the owner has not contracted with the municipality for the supply of services) and, if the occupier has opened a municipal account in its own name, then there will also be a proper contractual relationship between the municipality and the occupier (although most municipalities no longer allow an occupier to open an account in their own name).
3. It is important to note that, generally speaking, municipalities will only recognise the rights of the named account holder to give instructions (e.g. in relation to the disconnection of supply) in relation to any particular account.
4. It is also very important to note that, by virtue of certain bylaws (which apply in some but not all municipalities) in some instances the owners and occupiers of the property can be held jointly and severally liable for each other’s debt owing to the municipality, regardless of when the debt was incurred and further regardless of in whose name the account was held when the debt was incurred.
5. Lastly, a recognised right, underpinned by our Constitution, exists, in terms of which parties are able to enforce provisions of a contract entered into freely, so long as those provisions are not unlawful or contrary to public policy. This principal is known as freedom of contract and must be given effect to if the consequences are not unlawful.
Constitutional Rights – Occupiers
An occupier has a constitutional right not to be unlawfully deprived of their home, which means that a person can only be evicted from their home with an order of court which is granted only when it is just and equitable in the circumstances to do so. Occupiers of a property are also entitled to a basic supply of water at the property if this is necessary to maintain public health and hygiene, in terms of the Water Services Act. They might also be entitled to free water in terms of a basic supply based on the bylaws of the municipality concerned. For example, in the Johannesburg municipal district, only indigent households are entitled to the supply of 6 free kilolitres per month, and other residents do not receive any free water anymore. At present, there is no right to free electricity in our law, although it could potentially be argued that the right to receive the supply of electricity at a residential property forms part of the right to housing (one must remember here, however, that the right to receive the supply does not necessarily mean the right to receive that supply for free).
Constitutional rights – owners
A property owner has the constitutional right to not be arbitrarily deprived of his property. This is open to interpretation and could apply to countless scenarios, in which a landlord is being deprived of some or other aspect of his or her property or any one or more rights that would ordinarily flow from the ownership of that property. If the owner can show that the deprivation is arbitrary within the meaning of the Constitution (meaning that the reason for the deprivation is not reasonable or rational in the circumstances, or that the harm caused by the deprivation is not proportional to the object sought to be achieved by the deprivation itself) then the property owner will have proven that his constitutional right to property has been infringed, and would be entitled to some sort of relief from the court.
Constitutional obligations to supply services
There is no obligation in our law on a landlord to supply free services to a tenant or unlawful occupier and the only obligation that exists in our law for service delivery and the supply of free services lies squarely on the shoulders of the municipality or the Water Department concerned.
What Does The Above All Mean?
1. There is no contractual obligation, or statutory or constitutional obligation, on an owner to provide services to unlawful occupiers.
2. There is a contractual/statutory obligation to provide services to a property where a residential lease is in place, and this obligation is regulated by the Rental Housing Act, which provides that the supply of services to a rented property cannot be terminated without the occupier’s consent or an order of court.
3. A property owner is not obliged by statute or any other law to shoulder the municipality’s burden of supplying free municipal services to occupiers, either lawful or unlawful.
4. It is apparent from the above that a property owner wanting to disconnect services to a residential property where a lease is in place (or even where a lease was once, but is no longer, in place), must first obtain a court order before doing so, lest the action be unlawful in terms of both the common law (spoliation) and the Rental Housing Act.
5. It is the considered view of the authors, however, that this does not apply to the situation where there is no contractual relationship between the owner and the occupiers (i.e. where squatters have taken control of the property). In this scenario, the property owner is not lawfully obliged to provide the supply of the services to the property at all, by virtue of any piece of legislation or the common law or by any contract. There is also no act such as the Rental Housing Act providing that the termination without a court order amounts to spoliation. It is the view of the authors that there is also no application for the mandament van spolie in situations such as these because the mandament only kicks in when the supply to a property is unlawfully terminated – and if there was never an obligation to supply those services in the first place, the termination of those services by the landlord therefore cannot be unlawful. This, however, is quite controversial, as, to the knowledge of the authors, our courts have always (perhaps blindly) accepted that the termination of supply of services to a property without the occupier’s consent, regardless of the status of that occupier (i.e. whether or not that occupier is or was ever in occupation of the property in terms of a lease) amounts to spoliation and is unlawful. It is our respectful submission that this needs to be re– examined in light of the context set out above.
6. A property owner has a constitutional right to request that services supplied to his property be disconnected by the municipality. As long as this request is made in accordance with the prescribed forms / procedures of the municipality concerned, the municipality is legally obliged to carry out that request.
7. A municipality is not entitled to refuse to disconnect the supply to a residential property on the basis that the disconnection will impact on the constitutional rights of the occupiers concerned to receive services. Firstly, where the property is illegally occupied, there is no right to receive the supply of services from the landlord at all. Secondly, where there is a lease is place, even if the request to disconnect services of the landlord violates the constitutional rights of the tenants, this is a problem that must be dealt with by the tenants and the landlord by virtue of their contractual relationship to each other, and the municipality has no right to interfere with this relationship (and insist that the landlord continue to supply services even where a disconnection has been instructed) because it is not a party to the agreement that gives rise to constitutional or other rights at all.
8. However, a municipality may very well be under an obligation to notify the occupiers of the pending disconnection, as required by the Joseph Constitutional Court judgment, and give the occupiers an opportunity to make representations to it as to why the supply should not be terminated. This would be in line with the municipality’s obligations in terms of the Promotion of Administration of Justice Act, to give notice of a decision that would materially and adversely affect a consumer, and to allow that consumer to make representations as to why that action should not occur. It is submitted, however, that, in cases where the landlord has lawfully instructed that disconnection take place, for the reasons set out herein, a municipality would be obliged to terminate the supply even if the occupiers make representations to it as to why the supply should not be terminated. This would be the case so long as the rights that the occupiers rely on in their representations are not more ‘weighty’ from a constitutional perspective than the rights of the owner that are infringed by the continued supply.
For example, if the occupiers explain that without electricity they will die because they are all on ventilators, their right to life will (potentially) be infringed if the supply is terminated – and this would arguably ‘trump’ the landlord’s constitutional right to property – in a case like this, the municipality might be justified in not disconnecting but it is submitted that it would need to refer the dispute to a court for determination (or the landlord, being unhappy with the decision taken by the municipality not to disconnect, could approach a court for relief). However, if the occupiers indicate that they will simply be uncomfortable without electricity and water if the supply is terminated – and notwithstanding that it is terrible that any person should have to live without electricity or water supply – and remembering that access to water (but not the supply of water itself) is a constitutional right that (in many but not all cases will not be infringed because the municipality must continue to supply the free kl that it has committed to supply to each household or indigent households) – it is the authors’ view that the landlord’s right to his property would trump the occupier’s rights of access to water – precisely because the occupiers are illegally occupying the property and causing the landlord to suffer damage by not paying for their occupation or the costs of services associated therewith. This aspect is fraught with complexity and it remains to be seen how our courts will deal with it.
9. If a municipality insists on continuing the supply of services to a property (whether that property is lawfully occupied or not) then the cost of the supply must rest solely on the shoulders of the municipality, and it is the author’s view that the municipality is not lawfully entitled to hold the property owner liable for the continued cost of the supply.
The CTB Case
In this case, a property owner requested that the supply of services to a property that was unlawfully occupied be disconnected in November 2014. The owner filled in the prescribed form required by the municipality and the delivery and acceptance thereof was confirmed by the municipality. However despite the owner’s best efforts over a period of 4 years the municipality failed or refused to disconnect the supply of services to the property.
Due to the nature of the eviction proceedings (the building had been hijacked and the tenants opposed the eviction proceedings at every step) it took the owner more than 3 years to obtain a court order evicting the unlawful occupiers. At the time, that the eviction eventually took place, the municipality had still not disconnected the services supplied to the property.
In light of this, the owner launched court proceedings against the municipality to compel it to write off or reverse all amounts that were billed to the owner after the request for the disconnection of services was done (for water and electricity charges), as they would not have been billed to the owner, had the municipality complied with its duty to terminate the supply of services as applied for by the owner. In its defence the municipality raised various scenarios in terms of which it would not have been able to disconnect the supply to the property and /or where same would have been problematic. Its strongest defence was that if it had disconnected the services at the property, it would have amounted to spoliation and the unlawful occupiers could have brought an urgent spoliation application to have the services reconnected. However, the owner argued that as the municipality failed to comply with the disconnection completely, it cannot hypothesise as to what would have happened and must therefore accept that it did not happen.
The court agreed with the owner of the property and accordingly ordered the municipality to write off all water and electricity consumption charges that were consumed from the date that the notice to disconnect was delivered to the municipality up to the date of the eviction of the unlawful occupiers. This, to a certain extent, confirms that the court agrees that a municipality can and must disconnect the consumption services of an owner at their behest, failing which the municipality will be liable to bear the burden of the cost of same.
In a legal landscape where legislation makes it increasingly difficult for landlords to lawfully evict tenants and unlawful occupiers, and in an economic environment where many people are finding it hard to make ends meet as a result of (amongst other things) the increased costs of service supply (such as electricity and water), many landlords are finding that the continued cost of the supply of services to an unlawfully occupied (or even a lawfully occupied property where the occupiers are not paying for those services) is financially ruinous.
In the authors’ view a property owner is entitled to request that the municipality disconnect the supply to a property where it is unlawfully occupied and the occupiers never had a lease to begin with, without a court order, provided that the owner follows the prescribed and reasonable procedures to request disconnection from the municipality. The position regarding the situation where there once was a lease that was subsequently cancelled or expired, is less clear, but still arguably the same. The municipality will be entitled to continue the supply on its own dime should it deem this necessary, but a municipality is not entitled to deny an owner a disconnection merely because the property is occupied. Further, where a municipality completely ignores the request for disconnection, without any feedback whatsoever, it can at a later stage, once the unlawful occupiers have been evicted, be compelled to write off any charges in relation to the consumption charges that ought not to have been supplied in the first place. This may result in savings of hundreds of thousands or even millions to landlords who have been forced to endure years of municipality charges as a result of protracted eviction proceedings.