The utilities fiasco
When I viewed the house prior to buying it, I was told that there was a massive unpaid debt for water, lights and rates but that the bank would be settling it and I stipulated when I signed the offer to purchase that all outstanding arrears must be paid.
The house seller had fallen into arrears many years before that and once the squatter took over as a landlord, the tenants told me that on the first of the month, he would get out of bed, take the hosepipe and water the nonexistent garden and start yelling at the tenants to pay up. This really made me laugh because I had heard him tell the police that he was the gardener. This is what the "garden" looked like.
Once the tenants had given him money, a few days of drugs, alcohol, partying and womanising would commence. Although he was ostensibly the gay lover of the house seller, he had a child that he didn't support and spent most of his time with women. Once the rent money was blown, he would beg the tenants to feed him for the rest of the month.
The bank lawyers had settled the unpaid rates account and paid R99 000 (Approx $8500USD) towards settling the outstanding utilities bill and I thought that was the end of it but on 15 December, the city council cut the electricity off to the entire complex. When I enquired why, the body corporate revealed that there was in fact still R117 000 owed on the shared utilities bill. It turns out that one of the other owners in the complex was also a non-payer, had been locked in a feud with the body corporate and refused to pay any accounts for the last seven years, because he wouldn’t be transparent in his billing methods and she is a crook who realised that he was completely ineffectual. The complex had been paying bribes to various officials over the years whenever they arrived to cut the utilities and that was how the arrears had gotten to the point where over R200 000 was owed. I went with the Body corporate to the council offices where they informed us that there would be no negotiations unless half of the outstanding amount was paid, which amounted to almost R60 000.
The body corporate chairman, a grown-ass man, cried in the legal office, blaming everybody else for the fact that he didn't have any electricity, even though he pays his accounts. This turned out to be not entirely true and the best part of it is that this man works professionally in Human Resources. He is completely unable to deal with his neighbours.
R60 000 is not an amount of money that people keep as spare change and I asked to do an audit on the accounts so as to ascertain who was at fault. The body corporate claimed that the council was double-billing the complex. I'm no accountant but one glance at the statements told me that they weren't and that his understanding of the billing system was delusional. He was arbitrarily paying a set amount of money every month that it suited him to pay without even checking what the figures for the month actually were and he had based his calculations on the arrears on my unit on the same too-low amounts. He didn't even have all the statements. Luckily, these were available online so I downloaded them and spent the period between Christmas and New year crunching numbers in order to build a case for asking for the bank for more money to settle the arrears. The other non-payer in the complex agreed to settle her debts if I provided her with a rational audit trail of the figures. I could reliably prove that another R45 000 was still owed on my unit and that the body corporate actually owed about R28 000 and about R38 000 was owed by the other defaulter. Everyone agreed to pay.
In the new year, I went back to the bank's lawyers to present my case, unsure whether they would cancel the sale or not. It was sheer luck that the bank had already paid so much to the council - because they would not be able to get a refund, they decided to cut their losses and pay the rest just to get rid of the house. They lost heavily on the sale because the utility arrears amounted to just under one third of the purchase price and what remained did not cover the seller's debt.
The sale was finalised and I moved in to my house five and a half months after signing the offer to purchase, expecting the deal to be concluded within six weeks. The conveyancing secretary told me that this was the worst transaction she had ever handled and from a law firm that handles a large bank's repossession sales, that says a lot. If it wasn’t that I really loved the place and had set my heart on buying it, I would have walked away from the deal. I'm glad I didn't, I have no regrets now, but I told my friends thereafter that I'd always suspected that I had steel balls but I've come to realise that they must be titanium to have handled that episode.
I needed those titanium balls once again as I turned my attention to getting the utilities accounts separated. It was a sign of the laziness and incompetence of the body corporate that I was the one who ultimately made the agreement with council on repayment terms and got the electricity supply restored. I resolved to install prepaid electricity and get a separate water account as a matter of urgency. The utilities saga took exactly two years to sort out: stay tuned for another episode...