Property manager warns on Eskom's proposed price hikes

Tenants and landlords must prepare for Eskom's proposed rapid price hikes expected in 2010, property manager Trafalgar said on Wednesday. Thousands of tenants would not be able to meet the monthly cost of renting unless they and their landlords were well-prepared for Eskom's hikes, Trafalgar said in a statement.

Eskom has proposed increasing the cost of electricity by 45 percent a year for three years, after raising it 33 percent this year.

"Electricity that costs 60 cents per kilowatt hour now is expected to cost R1,60 by 2012," Andrew Schaefer, CEO of Trafalgar said.

Where the average monthly charge per flat was R800 it would be nearly R2 160, he said.

In many cases this would mean monthly electricity cost more than monthly rent, he said.

"In fact it is already happening and we know of one flat in Hillbrow where the tenants are paying R1 700 per month and their electricity is costing R2 900.

"The flat is overcrowded, occupants have a score of cheap heaters, hair dryers, TV sets and other appliances that gorge themselves on power, and of course the hot water geyser is working all day."

Schaefer said most tenants had not developed an energy saving consciousness.

He said sectional title bodies corporate faced the same growing crisis.

"Common property electricity makes up around 11 percent of the average levy now.

"That will increase to around 15 percent by 2012," he said.

The biggest problems in sectional title buildings was that the body corporate was responsible to the authorities for privately used electricity, "so if individuals fail to pay, the rest will have no choice but to carry them", he said.

Pre-paid metres would become essential in all buildings.

"Landlords must also beware of organised unrest, with themselves carrying the blame for the higher costs, they can't avoid taking some responsibility for their tenants' growing stress," Schaefer said.

He suggested reducing the normal 10 percent rent increase at the end of the lease, to around five percent "if the tenant pays on time, doesn't overcrowd and looks after the property".

He said landlords could also help to educate their tenants in energy saving and make sure their electrical system was running as efficiently as possible.

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