Is this “dunning charge” imposed by the Cape Town City Council legal? If so, is it for the landlord’s or the tenant’s account?
Insofar as dunning charges are concerned, the City of Cape Town is lawfully entitled to impose such charges upon property owners, and it is furthermore entitled to impose VAT thereon (as would be the case with any registered VAT vendor that imposes a collection charge on arrears).
Insofar as liability for those charges is concerned, the answer would be wholly dependent on the nature of the dunning charge in issue.
If, for example, the dunning charge has been imposed as a result of the property owner’s failure to pay his/her rates and taxes, then, of course, the charge will be for the owner’s account.
If, however, the charge has been levied as a result of accrued arrears in respect of services such as sewerage or refuse removal, or charges pertaining to the supply of water or electricity, and these are charges that are for the tenant’s account (pursuant to the terms of the lease agreement), then the dunning charge will be for the tenant’s account.
According to Investopedia, the definition of “dunning” is making insistent demands for the payment of a debt. Dunning, in the business context, refers to the collections process, whereby a business communicates with customers who have fallen behind in paying their bills. The term is believed to have originated in the 17th Century.
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Marlon Shevelew is the director of Marlon Shevelew and Associates Inc. a law firm specialising in rental property, contractual, consumer and company law. The firm is the recipient of more than 45 international property law awards. Marlon is current author of PayProp’s rental documentation and preferred rental property attorney to the Institute of Estate Agents South Africa (IEASA), the Rental Housing Tribunal Western Cape and presenter of the Advanced Residential Property Law Seminar endorsed by the University of Cape Town. Marlon has featured on Cape Talk 567 and Property Matters on DStv, contributes as a guest expert to several property publications and was invited by Juta to write a book on rental property law, by LexisNexis Butterworths to edit its forms and precedents on rental property law and, on no less than three occasions, was invited by the Law Society of South Africa to lecture and train candidate attorneys and attorneys on rental property law. Marlon also created the unique Rental Retainer Club, RentDoc and LevyDoc which offers clients affordable legal fees for rental property and sectional title related matters. Marlon is contactable on firstname.lastname@example.org anytime for more information on these services.