By Nangamso Mabindla
4 August 2005

ISSUING accounts to tenants will soon be a thing of the past in Buffalo City, according to Chief Financial Officer Brian Shepherd.

The City issued about 140 000 accounts monthly, of which 40 percent went to tenants.

"Tenants are moving in and out of properties and a great number of them do not settle their accounts with the municipality, not withstanding all the efforts from the municipality to recover debt," Shepherd said.

In the past year the City had been exceeding its collection targets as customers were paying their debts on time. One of the main reasons for this was the customer incentive scheme, aimed at encouraging residents to pay their electricity, water and rates bills on time.

The scheme was introduced in 2003.

However, the City was still struggling to recover arrears from tenants.

In a report to the Finance Standing Committee, Shepherd said that in terms of the Municipal Systems Act of 2000, when an owner wanted to sell his or her property a rates clearance certificate was required for the transfer.

It should be withheld until all rates and service payments due and outstanding for two years prior to the application for the certificate had been fully paid.

In addition, according to the act amounts outstanding for all charges became a charge against the property, which provided a mechanism enabling the municipality to collect arrears that had been outstanding for more than two years.

"The outstanding debt referred to here is debt accumulated by the owner and tenants on a property. The tenant's debt in the situation relating to the above becomes the responsibility of the owner," Shepherd added.

To avoid this, the owners needed to use their constitutional right to get their tenants' accounts from the municipality.

Shepherd said Buffalo City was investigating neighbouring Nelson Mandela Metropole, which was successfully improving customer services through its policy of only allowing owners to enter into service agreements with the metro.

The City council was concluding municipal service agreements with owners and tenants, and the municipality would recommend that applications for the provision of services to a property be made only by the owners.

"The owners of the property need to conclude a written agreement with the council in terms of which the owners would be responsible for consumption charges," Shepherd said.