As a property owner or investor, one of your most significant concerns may be the timely payment of rent by your tenants. Late or unpaid rent can create financial strain and administrative burdens, affecting your cash flow and property management. However, there’s an innovative solution on the table that can help property owners not only manage their utilities efficiently but also ensure rent collection in a legally sound manner: specialised prepaid electricity and water meters.

Understanding Prepaid Meters:

Prepaid meters, also known as pay-as-you-go meters, revolutionise the way tenants pay for electricity and water. But now, one of our longstanding members of the Wealth Masters Club has created a solution that will bridge the gap between utility collection and tenant management.

Here’s How A Prepaid Meters Generally Works

Installation: The utility company or an authorised technician installs the prepaid meter in the consumer’s premises.

Token or Recharge Voucher: Tenants purchase a token or recharge voucher from authorised vendors, containing a unique code or number.

Entering the Token: Tenants input the code or number from the token into the prepaid meter via a keypad or display panel.

Credit Allocation: The prepaid meter verifies the code and allocates the corresponding amount of electricity/water units to the tenant’s account.

Monitoring Usage: Tenants can monitor their electricity/water usage and available credit on the meter’s display panel or through a separate monitoring device provided by the utility company.

Electricity/Water Consumption: As tenants use electricity/water, the prepaid meter deducts the appropriate amount of units from their account based on consumed energy.

Low Credit Alert: When available credit drops below a certain threshold, the meter may provide a warning, prompting the tenant to recharge their account.

Recharging: To continue using utilities, tenants need to purchase and enter a new token or recharge voucher.

How Can This Be Used To Protect Landlords And Investors?

Trusted Meter Solutions (TMS) goes beyond being just another prepaid meter provider. They offer valuable tools to both landlords and tenants. They have created a solution where a landlord or investor can control the allocation of spend for electricity if the tenant is in arrears with their rental, which means the landlord/investor can automatically get a predetermined percentage of the value put in to the meter if the tenant is in arrears.

Some of the benefits include:

Rental Lock Facility: TMS offers a unique feature where landlords can restrict tenant access to the system if rent or other fees are owed. This feature is legally sound when included in the lease agreement.

Arrears Collection: Landlords can set arrears collection at a ratio of the electricity amount put in to the meter (e.g., 40%), ensuring they receive funds while dealing with defaulting tenants. All fees are covered by the tenant when purchasing electricity.

Legal Backing:

In a 2016 case at the Small Claims Court and the Rental Housing Tribunal, the Rental Lock Facility’s legality was affirmed. Tenants who sign the lease agreement, including these terms, are held liable for payment.

The team at Trusted Meter Solutions wanted to create a solution that differs from simply “shutting off” their power. Instead, they temporarily suspend access to the system. In the event that a tenant’s device runs out of electricity, they won’t be able to access the system to purchase more. This approach, as required by an attorney-reviewed lease agreement terms, is what makes the process legally sound.

This means that the landlord has ultimate power over tenants who are in breach of their contract, whilst also not preventing them from their basic needs. It ensures landlords are compensated, improving cash flow even when dealing with defaulting tenants and reducing out-of-pocket costs.

Why Prepaid Meters Are a Wise Choice:

Tenant Awareness: Prepaid meters make tenants more aware of their consumption, preventing surprise bills and ensuring they pay upfront for what they use.

Admin Time Reduction: Property owners no longer need to read meters or calculate bills, reducing administrative burdens.

Water Management: Prepaid water meters encourage tenants to report maintenance issues promptly, preventing disputes and unexpected bills.

Emergency Shut-off: Prepaid water meters serve as emergency shut-off valves in cases of burst pipes or geysers, preventing excessive water wastage by limiting this wastage to only the credits on the pre-paid meter vs running continuously un-noticed on the municipal meter.

Conclusion:

Incorporating prepaid electricity and water meters into your property management strategy can be a game-changer. It not only empowers tenants to be responsible for their utility usage but also helps property owners ensure rent collection efficiently and within the bounds of the law. With Trusted Meter Solutions, property owners can harness the power of prepaid meters to optimize their property investments and minimize financial risks. Take control of your investment today and partner with Trusted Meter Solutions to make the most of this powerful utility management tool provided by South African law.