Landlords: Can You Cut Electricity to Collect Arrears or Evict?
Landlords can be sorely tempted to force defaulting tenants to settle their arrears (or to vacate the premises altogether) with a bit of instant “self-help” by cutting electricity or water supplies, or perhaps by changing locks or disabling access codes.
From the High Court comes another timely warning that you cannot resort to self-help without risking an immediate and costly “spoliation order”.
What exactly is a spoliation order?
In a nutshell, it is an order rapping you over the knuckles for taking the law into your own hands and forcing you to return to the previous status quo whilst you fight your weary way through proper legal channels.
To quote from a 2012 Supreme Court of Appeal decision (emphasis supplied): “Spoliation is the wrongful deprivation of another’s right of possession. The aim of spoliation is to prevent self-help. It seeks to prevent people from taking the law into their own hands … The cause for possession is irrelevant – that is why a thief is protected … The fact that possession is wrongful or illegal is irrelevant, as that would go to the merits of the dispute”.
The two things the tenant must prove
At this stage, the court is not interested in how strong or weak the landlord’s claim may be. Your full-on fight over the “merits of the dispute” comes later, and all the tenant need show now is –
That it was in “peaceful and undisturbed” possession, and
That it was “unlawfully deprived” of that possession.
The filling station, the laundromat and the “personal rights” argument
A landlord was in a protracted clash with two of its long-standing tenants – a filling station and a laundromat – over disputed electricity arrears totalling some R240k. As often happens, the landlord was on the hook for the arrears, and was, it said, “facing financial ruin”. The leases had been cancelled and High Court litigation over the disputes was pending.
Eventually, by agreement, pre-paid meters were installed. The tenants loaded their first credit tokens but suddenly found themselves unable to top up the meters. It turned out that the landlord had instructed the electricity supplier to load the arrears onto the pre-paid meters, meaning that the tenants would have to pay the disputed arrears before they could buy more electricity.
When the tenants launched an urgent spoliation application, the landlord argued that the tenants’ rights to a supply of electricity were purely “personal rights” in terms of their respective leases. Thus, argued the landlord, spoliation could not apply.
The tenants countered that “the right to access to electricity supply is an incident to the possession of the property from which they conduct their businesses” which would come to a standstill without electricity.
The Court’s analysis of the various legal arguments around the “personal rights v incident of occupation” fight, and over whether our law recognises “quasi-possession” of an “incorporeal” (like electricity) – as opposed to “actual possession” of the property itself – will be of great interest to lawyers. But for landlords and tenants it is the practical outcome that really matters.
Finding that there was an “irresistible inference that the [landlord] effectively cut the electricity (by uploading the arrears on the pre-paid meter) to force the [tenants] to vacate and to avoid having to follow due process to recover the alleged arrears” and that “this is a matter where the interference on the supply of electricity … constituted material interference of the possession of the property itself”, the Court ordered the landlord to immediately (a) restore the tenants’ access to their electricity supply and (b) cancel the negative and arrear balances on their pre-paid meters. An adverse costs order rubs salts into the landlord’s wounds.
The lesson for landlords
No matter how strong your main case may be, taking the law into your own hands is likely to be a costly mistake. Seek legal advice before you take any form of self-help action!
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)