Residents pay the price for a restaurant in their estate
Home owners in an estate are paying as much as 75% more for power because they have a restaurant.
Image: Freepik
Johannesburg residents on two large private estates will continue paying business electricity rates – which can be as much as 75% higher per unit than domestic tariffs – all because their estates include restaurants.
This follows the Supreme Court of Appeal's dismissal of their appeal to be charged at domestic rates.
The dispute involved Malakite and Greenstone body corporates, which manage estates in Greenstone Hill, Modderfontein.
Both estates include hundreds of residential units – Malakite has 290 and Greenstone 620 – and small lifestyle centres with a restaurant and a gym.
The estates argued that the lifestyle centres and restaurants couldn’t exist without the residents, so electricity charges should be for domestic use rather than business.
They also suggested hypothetical scenarios where residents could be unfairly charged business rates – for example, a church selling sandwiches or a caravan park with a small kiosk.
The courts dismissed these examples, noting that the by-laws are designed to ensure municipalities recover the full cost of electricity supplied to both residential and commercial consumers.
City of Johannesburg and City Power argued that because the restaurants are commercial operations and their electricity is combined with residential units, the estates must pay business rates until separate meters are installed.
The municipality’s tariff policy defines business tariffs to include “mixed domestic and non-domestic loads” and commercial operations such as restaurants.
Both estates had asked the municipality to install split meters, but the disputes over charges could not be resolved.
“The installation of the split meters was abandoned or pended by both the appellants, apparently due to the high cost of the installation,” the ruling reads.
A previous court rejected the estates’ arguments, finding that the restaurant was “commercial in nature and not domestic” and that “electricity usage of a business premises is different to that of a residential dwelling.”
The SCA upheld this reasoning, emphasising that the by-laws and tariff policy are clear and unambiguous: if a communal electricity load cannot be separated between domestic and business use, the municipality must apply a business tariff.
The court said attempts to redefine “mixed domestic and non-domestic load” based on the proportion of residential versus business use would create “great uncertainty” and be “untenable.”
The SCA made it clear that until meters are installed, business tariffs apply, and it dismissed the appeal with costs.
Residents of these estates can expect their bills to remain higher because of the commercial component of their electricity supply.
IOL BUSINESS