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Electricity crisis: Where do tenants stand?

Home Engineering Electrical Electricity crisis: Where do tenants stand?

AS South Africa grapples with an escalating electricity crisis and an uncertain future on the energy front, tenants may wonder about the feasibility of asking for solar energy and what rights they possess in navigating this transformative process.

The ongoing electricity crisis has left many South African residents seeking more stable and sustainable energy sources, says Antonie Goosen, principal and founder of Meridian Realty. “In light of this, tenants are increasingly considering the adoption of solar electricity as a viable solution but are unclear on their rights in this evolving landscape.”

Goosen says tenants hold certain fundamental rights in their housing arrangements, including the right to a habitable living space and reasonable enjoyment of the property. “In the context of the electricity crisis, tenants have the right to inquire about and request alternative energy solutions, such as solar electricity, from their landlords, but tenants need to be proactive in understanding their rights and engaging in open communication with landlords to address their evolving needs.”

“Wherever it is possible, I believe requesting solar energy as a tenant is a proactive step towards a sustainable future. Tenants can initiate conversations with landlords about the feasibility and benefits of integrating solar panels on the property. There are some important points to keep in mind when doing this,” says Goosen.

Goosen says when it comes to negotiation and agreement, the process of adopting solar electricity should involve open communication and negotiation between tenants and landlords. “Both parties can discuss the feasibility, costs, and benefits of installing solar panels, inverter, and battery systems on the property. A transparent agreement should be reached to outline responsibilities, maintenance, and any associated costs,” says Goosen.

He says it is important to consider the regulatory framework. “At Meridian Realty we advise tenants and landlords to always be aware of any relevant regulations and incentives related to the installation of solar panels and inverter systems. In some cases, government incentives may be available to encourage the adoption of renewable energy solutions. Staying informed about the legal landscape can facilitate a smoother transition to solar electricity,” says Goosen.

Goosen says if an agreement is reached between the two parties, all the rights and responsibilities need to be accounted for. “Both tenants and landlords have rights and responsibilities in this process. Tenants have the right to a habitable living space, and landlords have the responsibility to maintain the property. If solar panels are to be installed, a clear agreement should outline the responsibilities for installation, maintenance, and potential adjustments to rent,” says Goosen.

Stefan van Niekerk, director of Minitzers Attorneys, says while solar energy is becoming increasingly common in the residential landscape, there are several legal implications to consider when it comes to solar electricity in rental properties. “In South Africa, should a tenant install solar panels in a rental property without a duly signed addendum to the lease agreement specifying that the tenant remains the owner of the panels and will, upon termination of the lease remove such panels (and ancillary equipment), the landlord will be considered to be the owner of the installation due to it being seen as an improvement to the property which the landlord is entitled to,” says Van Niekerk.

He says a lease addendum stating that the tenant is the owner of the solar installation will safeguard the tenant to the use of the electricity as well as the ownership of the installation. The tenant will also have to cover the cost of the certificate of compliance for the installation and all maintenance costs.

Van Niekerk says while tenants do have certain fundamental rights in terms of the Rental Housing Act, the uninterrupted supply of electricity (i.e. instances of loadshedding) is beyond the landlord’s control and the tenant cannot demand a solar installation. “Should the landlord choose to install a solar system the tenant can be made liable for their use thereof by way of a submeter installed to measure the kW generated by the solar installation and utilised by the tenant. The landlord can thus recover from the tenant its solar electricity usage to finance the capital outlay while the tenant enjoys the benefit of uninterrupted electricity supply.

“Alternatively, the parties can agree on a fixed fee, over and above the monthly rental as a contribution to the landlord for the cost of the installation, including maintenance, insurance, and compliance certificates.

“There must be an agreement between the parties as to the cost either at the commencement of the lease or by way of addendum – the landlord cannot unilaterally pass the cost and maintenance of the solar on to the tenant without the tenant’s approval. How this cost is to be calculated will depend on the size of the system and the amount of solar electricity generated for the benefit of the tenant,” says Van Niekerk.

Van Niekerk says in the event where a tenant moves into a house with solar already installed the tenant would be generally entitled to use the generated electricity for its own use, however, this right may be restricted in the lease agreement as far as what appliances may be connected to the solar installation.

Goosen believes there are significant long-term benefits that solar energy offers for both landlords and tenants. “Beyond the initial investment, solar electricity can result in reduced operating costs for tenants through electricity savings, which can be passed on to landlords in the form of higher rental rates. Additionally, solar-equipped properties often experience an increase in market value, contributing to a more sustainable and financially viable real estate portfolio,” concludes Goosen.

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