Charging tenants for electricity: prepaid meters and sub-meters
Unless every unit has its own municipal account, the landlord pays the municipality and has to get the electricity back from the tenants. There are two ways to do it, one rule on price that applies to both, and a few habits that save the argument at move-out.
Two ways tenants pay for electricity
| Prepaid meter | Post-paid sub-meter | |
|---|---|---|
| Who pays when | The tenant buys tokens before using the power. | The tenant pays after the month, on their statement. |
| What you do | Nothing per month. The vending company pays the token sales over to you, less its fee, and sends a sales report. | Read every meter on the same day each month, bill the usage, and follow up anyone who doesn't pay. |
| Arrears risk | None: no token, no power. | Like rent: an unpaid electricity bill is a debt you collect. |
| Best for | Flats and buildings with several units. | A cottage or a few rooms on the landlord's own meter. |
The one rule on price
A landlord who sells electricity to tenants is reselling it. NERSA's position, and most municipalities' electricity by-laws, is that a reseller may not charge more than the tariff the municipality would charge for that supply. In practice that means billing each kilowatt-hour at the rate on your own municipal bill, and sharing any fixed monthly charge fairly (by unit or by usage) in a way the lease spells out.
Check your municipality's by-law: some set the tariff a reseller must use, and some require prepaid meters to be approved models. Prepaid vendors usually take their admin fee from what they pay over to you rather than adding it to the tenant's tokens; check how yours does it.
Put it in the lease
- Whether the unit has a prepaid meter or a sub-meter that you read.
- For a sub-meter: the tariff basis (the municipal rate), how fixed charges are shared, the reading day and when the bill is due.
- That the closing reading is taken at move-out and settled before the deposit is refunded.
Electricity owed under the lease is one of the amounts a deposit may lawfully go towards at the end, with the rest refunded on time (see our deposit guide).
Readings that hold up
- Same day each month. A bill that covers 27 days one month and 35 the next invites a dispute.
- A photo of the dial. A number typed into a spreadsheet is your word against theirs; a dated photo is not.
- An opening and a closing reading. Take one on the move-in inspection and one at move-out, so neither tenant pays for the other's power.
- The bill shows its working: previous reading, this reading, units used, tariff.
Prepaid: read the sales report
With prepaid meters there is nothing to bill, but the monthly sales report tells you things nothing else does. An occupied unit that buys nothing for a month may have a bypassed or faulty meter. A unit you think is empty that keeps buying tokens has someone living in it. A unit buying far less than similar units in the building is worth a look.
Mastendi reads the meters with your tenants and bills the month
Tenants send their reading with a photo from the tenant portal, reminded on the 25th of each month; the usage is billed on their statement at your tariff straight away, and sits in your To review list for a week so you can check it or decline it. The closing reading is taken on the Deposit tab at move-out. For prepaid buildings, import the vendor's monthly sales report and Mastendi flags the units that bought nothing, bought too little or bought while vacant.
Start your 30-day free trialFrequently asked questions
Can a landlord charge tenants more than the municipal electricity tariff?
Generally no. A landlord who sells electricity to tenants is a reseller, and NERSA and most municipal by-laws limit a reseller to the tariff the municipality charges for that supply. Check your municipality's by-law.
Is a prepaid meter better than a sub-meter for a landlord?
For several units, usually yes: tenants pay before they use the power, so there are no electricity arrears, and the vendor pays you the token sales less its fee. A sub-meter you read and bill suits a cottage or a few rooms on your own meter.
Can unpaid electricity come off the deposit?
Yes, if the lease makes the tenant liable for it. At the end of the lease the deposit may go towards amounts the tenant owes under the lease, with the balance refunded within the Rental Housing Act's deadlines.
How often should a sub-meter be read?
Once a month on the same day, with a dated photo, plus an opening reading at move-in and a closing reading at move-out.
Disclaimer: This guide is general information for South African landlords and is not legal advice. Electricity reselling is governed by NERSA's rules and your municipality's by-laws, which differ from city to city and change. Confirm the rules that apply to your property with your municipality or a qualified adviser before acting.