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Construction|Consulting|Financial|Rental|Service|Services|Water
Construction|Consulting|Financial|Rental|Service|Services|Water
construction|consulting-company|financial|rental|service|services|water

Twisting the knife

6th November 2020

By: Terry Mackenzie-hoy

     

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In the wonderful musical, Les Misérables, the lead character, Jean Valjean, goes to a hotel to collect the daughter of Fantine. Fantine has been paying a couple who run an inn to look after her daughter, Cosette.

When Valjean gets to the inn, the innkeepers make him pay large sums of cash for imaginary services they supplied to the child: medical treatment, food, clothing, and so on. In the musical, the innkeepers are depicted as being serious rip-off artists. Monsieur and Madame Thénardier are greedy and awful. Now, with the lockdown and the pandemic, a new form of ‘greedy’ and ‘awful’ has arisen and this, surprisingly, includes the usually benevolent City of Cape Town.

It’s like this: in Cape Town in 2019, rentals rose rapidly. The sums asked were in no real relation to the actual worth of the property or what amenities it had – it was just a market thing. Small flats in Kalk Bay that had outside toilets and no off-street parking were going for R6 500 a month. But people, perhaps foolishly, paid.

And then came the lockdown. Many people lost their income. Karate teachers had no school halls to teach in. Hairdressers, manicurists, casual workers, massage therapists, construction workers . . . all had no money. The financial relief programmes by government and the private-sector Sekuma fund were a joke (guess what, we are still waiting for just an acknowledgement of our applications). Fortunately for my consulting practice and my staff, we had dug our well before we were thirsty. Payments went on as if nothing had happened. All the staff went home with laptops and we continued to service our clients. But many ran out of money. With that, many could no longer pay their rentals. To begin with, there was nothing that landlords could do. To try to evict a family in a Level 5 lockdown was almost impossible. And then things turned nasty. Many, many families began by paying half rentals and were summonsed to court, where the magistrate said to the landlords, sorry, you have to stay at home and so do your tenants. The families thought, hello, and stopped paying rentals at all.

But now the lockdown level has reduced and the courts are giving eviction dates. Landlords are now demanding a double deposit for any rental, which has few takers. Even more, landlords have decided not to pay rates due on their premises since they are getting no rental money in. The reaction of the City of Cape Town to this nonpayment of rates is to deduct money owing from any payments for prepaid electricity. But it is not the owner who is buying prepaid electricity; it is the people on the premises who are not paying rent. Thus, if they buy R300 worth of electricity and there are outstanding rates, then the City of Cape Town keeps R213 against the rates owed and only gives them R87 worth of electricity, which, in these times, is 30 kWh. In the household Chez Mackenzie-Hoy, we use 13 kWh a day, so 30 kWh is not very much.

Thus, of all the parties, the people leasing the premises (who have no money), the owner (who is getting no rent) . . . it is the City of Cape Town that scores its pound of flesh. And the owner, even if the double deposit is paid, will have to sort out all the rates outstanding before the new tenant can buy prepaid electricity. It gets worse. If the rates are in arrears for a longer time, then the city throttles back the water supply to a trickle. Legally, I think that something must be wrong here. The owner has a contract with the City of Cape Town to pay rates, which are for water, refuse and sewage. The electricity contract is with the occupier, not the owner, but the city now penalises the one to make up the deficiency of the other. I think, strictly speaking, under normal times, this may be okay. Under lockdown, it’s not.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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