South Africans renting a home may risk losing their investment in the backup power systems they’ve installed if they fail to consider an addendum with the landlord to remove the installation upon the termination of the lease agreement.
South Africa’s power grid is under significant strain due to a combination of factors, including population growth, increased demand for electricity, poor management and ageing infrastructure.
This strain has led to frequent power outages and load shedding, which has had and continues to have a major impact on the country’s economy and the daily lives of every South African.
According to Daily Investor, the Council for Scientific and Industrial Research (CSIR) senior researcher Monique le Roux said the South African economy lost R560 billion because of load shedding in 2022, and things are unlikely to change in the next few years.
She added that although it is hard to predict the future, another ten years of load-shedding is a possible scenario.
As of Tuesday (10 January 2023), power utility Eskom announced that load shedding will be pushed to stage 6. The pattern of stage 4 load shedding between 05h00 and 16h00, and then stage 6 between 16h00 and 05h00 will repeat until further notice, Eskom said.
Prolonged load shedding and the prediction that it will remain a reality for South Africa long into the future has meant that many South Africans have decided to install backup power supply to their properties to mitigate the effects of having no power at home for extended periods.
Additionally, almost all major banks now offer loans to provide finance to their customers specifically for backup utilities due to their expense – whether it be generators, batteries, or renewable energy sources such as solar.
However, TPN Credit Bureau warned those renting properties to consider South Africa’s property laws before installing any backup utilities.
Tenants must sign an addendum to remove any backup utilities
It’s important to understand that once installed on the property, the generator, inverter or solar system will be considered a fixture to the property and become the property of the landlord unless there is a prior agreement – in writing and signed by both parties – that the tenant will remove the installation upon the termination of the lease agreement, said TPN.
If your intention is to remove any installation when you decide to move to a new home, TPN suggests that you present the landlord with an addendum – which is a form of a separate signed agreement that is attached to the original lease.
The addendum will allow both parties to mutually agree on who is responsible for the costs of installing, maintaining, and insuring the backup utility – including who ultimately owns these fixtures, said TPN.
The credit bureau added that it is strongly recommended that an addendum be drawn up to avoid any ambiguity and unnecessary costs at a later stage.
The addendum should deal with issues such as maintenance, operating costs and the party responsible for providing an electrical certificate of compliance with the installation, depending on which party is installing the utility.
TPN also noted that should the landlord choose to provide an alternative energy supply – despite not being legally obliged to do so – the tenant can be made liable for their pro rata use costs of the backup utility, including maintenance, insurance, compliance certificates and the fuel required to operate it.
However, this condition must be included in the lease agreement or in a signed addendum between the parties. Unless the charges are included in the lease agreement or a signed addendum, landlords cannot pass on any costs associated with supplying an alternative energy source, said TPN.