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Can a share block, body corporate or HOA switch non-payers to prepaid electricity?

GridAI · 5 November 2026 · Law as at 5 November 2026

Yes, if the scheme follows the right process, and no, if it uses the prepaid meter as a weapon. Selected units can be switched without the owner's consent or a court order once the scheme has the authority to do it. The meter may never be used to collect levies.

In one minute

  1. You can switch selected units to prepaid, and you do not need the owner’s consent or a court order to change the meter type. What you need depends on your scheme:
    • Share block: a clause in the MOI (or articles) or the use agreement that allows it. If there is none, add it first.
    • Sectional title: a special resolution under Prescribed Management Rule 29(4), with 60 days’ notice.
    • HOA: a clause in the MOI, constitution or rules that allows it. If there is none, add it first.
  2. You may not use the meter to collect levies. Same for all three schemes. No disconnecting, blocking or throttling supply for arrears, and no loading arrears onto the meter so the owner must clear them before buying credit. CSOS treats that as spoliation and orders it reversed. Only a court can authorise disconnection.
  3. Prepaid stops future utility arrears. It does not recover old levies. Same for all three. Old levies go through CSOS adjudication, rent diversion or a court judgment.
  4. Do the switch as a change of meter type, never as an interruption of supply. Same for all three. Authority first, objective criterion (not names), written notice, start the meter with credit, apply the rule to everyone.

The rest of this article unfolds those four points. Where the answer differs by scheme type, you will see the same three lines (share block, sectional title, HOA) so you can read only the one that applies to you.

Which scheme are you?

The three scheme types answer to different laws, but all three answer to CSOS.

  • Share block: A company owns the whole property. You own shares in that company plus a use agreement that gives you the right to occupy a specific unit. The Share Blocks Control Act, the Companies Act and the company’s MOI and use agreement govern. “Levies” are contributions to the company’s levy fund under section 13 of the Share Blocks Control Act.
  • Sectional title: You own your section outright and an undivided share of the common property. The body corporate is governed by the Sectional Titles Schemes Management Act (STSMA) and its Prescribed Management Rules (PMRs).
  • HOA: You own your erf (freehold). The homeowners’ association is a non-profit company or common-law association governed by its MOI or constitution and the rules made under it, binding on members by contract.

The Community Schemes Ombud Service Act names all three as community schemes. CSOS can adjudicate a dispute in any of them, and its list of unlawful levy-collection practices applies to all three.

Does the whole estate have to switch to prepaid at once, or can we switch only the non-payers?

You can switch selected units. None of the three regimes requires an all-or-nothing switch.

  • Share block: The use agreement sets the terms on which each member occupies their unit. If the MOI or use agreement allows the company to install prepaid metering or to convert an account in arrears, the company can apply that to one unit or all of them. Nothing in the Share Blocks Control Act requires a scheme-wide switch.
  • Sectional title: PMR 29(4) allows the body corporate, by special resolution, to install prepayment meters on the common property to control the supply of water or electricity “to a section or exclusive use area”. It is written per section, not per scheme, so selected units can be converted. CSOS has itself ordered prepaid installed at a single defaulter’s section (Eagle Breeze Body Corporate v Khaas and Motsei, CSOS0001810/GP/19).
  • HOA: If the MOI, constitution or rules authorise prepaid conversion of a member’s erf, the association can apply it to one erf or all of them.

Our recommendation for all three: use one objective criterion, for example “any account more than 60 days in arrears on utility charges converts to prepaid at the owner’s cost, on 30 days’ written notice”, rather than a resolution or decision that names specific units. A criterion applied to every owner, trustees and directors included, survives a CSOS “unfair treatment” challenge far better than a list of names.

What authority do we need, and what vote?

Authority comes from your governing documents. Only sectional title has a fixed statutory threshold.

  • Share block: Check the MOI (or old articles) and the standard use agreement. If either allows prepaid metering or conversion for arrears, the board can act on it. If neither does, amend first. The Companies Act applies to a share block company, so an MOI amendment is a special resolution of members unless the MOI sets a different threshold. A change to the use agreement itself must be in writing and signed (section 16 of the Share Blocks Control Act): in practice, through a clause in the use agreement that lets the company make house rules, or by having members sign an addendum.
  • Sectional title: Plain separate (post-paid) meters need an ordinary resolution under PMR 29(3). Prepaid meters need a special resolution under PMR 29(4): at least 75% of votes, by both value and number, of members represented at a general meeting called on 30 days’ notice, or, in writing, at least 75% by value and number of all members’ votes.
  • HOA: Check the MOI, constitution and rules. If there is an authorising clause, the directors can act on it. If not, amend the rules by whatever resolution the MOI or constitution prescribes (for a non-profit company, usually a special resolution of members). CSOS does not approve HOA rules in advance (its power to vet governance documents has not been extended to HOAs), but it can declare a rule invalid or unreasonable if a member disputes it.

Converting a defaulter before the authority exists is the common mistake in all three scheme types. Adjudicators order the status quo restored.

How much notice must we give?

Sectional title has a statutory minimum. The other two follow their own documents, and we recommend copying the sectional title pattern.

  • Share block: Whatever the MOI or use agreement requires, plus reasonable written notice to the member and the occupier. There is no statutory minimum. We recommend giving the same 60 days’ notice of the decision as a body corporate must, with the same cost details, so the process is as defensible as the one CSOS already knows.
  • Sectional title: All members and occupiers must receive at least 60 days’ notice of the proposed PMR 29(4) resolution, with details of the costs of the prepayment system and its estimated effect on the cost of services over the next three years. PMR 29(5) adds that the installation may not infringe occupiers’ constitutional right of access to essential services, or tenants’ rights under the Rental Housing Act or any other law.
  • HOA: Whatever the MOI, constitution or rules require, plus reasonable written notice to the member and the occupier. No statutory minimum. Same recommendation: copy the 60-day pattern.

In all three, send a further written conversion notice to the affected owner and occupier stating the date, the arrears figure that triggered it, and the cost.

Neither, in any of the three schemes, provided the authority above exists. A court order is for disconnection, not for changing the meter type.

  • Share block: The member agreed to the MOI and use agreement when they took up the shares. A conversion made under those documents does not need fresh consent.
  • Sectional title: A valid special resolution binds every owner, including those who voted against it.
  • HOA: The member agreed to the MOI, constitution and rules when they bought in. A conversion made under them does not need fresh consent.

Is this our meter to change, or the municipality’s?

Only the meter the scheme owns. If the municipality meters the unit directly, the municipality’s credit control policy governs.

  • Share block: Nearly always the scheme’s meter. The company is the registered owner and holds the municipal account, so units are supplied through the company’s own sub-meters.
  • Sectional title: Usually the scheme’s meter where the body corporate is the bulk buyer and resells through sub-meters. Where City Power or the municipality has installed its own meter in a section, the body corporate has no say over that meter.
  • HOA: Often the municipality’s meter. Many freehold estates are metered erf by erf by the municipality. This article only applies where the association is the bulk buyer and resells through its own sub-meters.

What can the scheme never do, even with prepaid?

Use the meter to collect levies. Same for all three schemes.

The line CSOS and the courts draw is this: a prepaid meter that switches off because the resident bought no credit is the resident’s choice. A scheme that disconnects, blocks or throttles supply to make a resident pay is spoliation. The resident is in possession of the unit whether they own it (sectional title, HOA) or occupy it under a use agreement (share block), and spoliation protects possession. Specifically:

  • No disconnection for arrears without a court order. CSOS has held that disconnecting electricity without a court order is unlawful. Cutting water, electricity or gas to a section or erf over non-payment is on CSOS’s list of unlawful practices, and scheme rules providing for disconnection of essential services for non-payment of levies are non-compliant (CSOS Circulars 1 of 2018 and 1 of 2019).
  • No blocking the prepaid meter. In the Witfield Ridge Body Corporate matters (CSOS adjudication orders, 8 August 2023) the adjudicator ordered the body corporate to unblock the applicants’ prepaid electricity meters.
  • No loading levy arrears onto the meter. CSOS lists loading a prepaid electricity or water meter so that arrears must be paid before services can be bought as an unlawful practice. The same goes for recovering levy arrears through the electricity tariff.
  • No restricting gate access over outstanding levies.

The court route does exist. In Body Corporate The Straight v Katisi [2025] ZAGPJHC 2 (3 January 2025) the High Court granted judgment for arrear levies and utilities and authorised disconnection until the arrear electricity charges and interest were paid. Two things to note. The body corporate accepted it could not disconnect on its own, and asked the court. And the court relied on an agreement between the owner and the body corporate that disconnection could follow non-payment. The order is the difference. Trustees and directors do not get to make that call themselves.

A note for share blocks and HOAs: your use agreement or rules may already contain a clause allowing disconnection for non-payment. That is the kind of agreement the court relied on in The Straight. It is a reason to ask the court for an order. It is not a licence to pull the switch yourself.

How do we recover the levies that are already owed?

Through CSOS or the courts. Same remedies for all three schemes, with one difference in what the debt is called.

  • Share block: The debt is the member’s contribution to the levy fund under section 13 of the Share Blocks Control Act, plus any utility charges under the use agreement.
  • Sectional title: The debt is the owner’s contribution under the STSMA, plus utility charges recovered under PMR 29(3).
  • HOA: The debt is the member’s levy under the MOI, constitution or rules, plus utility charges under the same.

For all three, the routes are:

  • CSOS adjudication under section 39(1)(e) of the CSOS Act: an order for payment of a contribution or any other amount. Under section 56 an adjudication order is enforced as a magistrates’ court judgment, or a High Court judgment if the amount is beyond the magistrates’ court’s jurisdiction.
  • Rent diversion under section 39(1)(f): for a tenanted unit, an order that the tenant pays rent to the scheme instead of the owner or member until a specified amount is settled.
  • Court judgment and execution through the ordinary courts.
  • Prepaid for future utility charges, which stops the arrears growing while the above runs. That is its job.

How do we run the conversion so it holds up at CSOS?

Make the switch a change of meter type, never an interruption of supply.

  1. Authority first.
    • Share block: MOI or use agreement clause; amend first if absent.
    • Sectional title: PMR 29(4) special resolution.
    • HOA: MOI, constitution or rule clause; amend first if absent. In all three: objective criterion, not a list of names.
  2. Notice. 60 days for the sectional title resolution; the same 60 days recommended for share block and HOA. Then a written conversion notice to the affected owner or member and the occupier, with the date, the trigger and the cost.
  3. Qualified installer. The physical switch must be done safely by a qualified person.
  4. Start the meter with credit. Load a small opening credit on conversion day so the change-over itself never causes an outage. It removes the “you disconnected me” argument entirely.
  5. Keep purchases open from minute one. Never tie token or wallet purchases to the levy account. Utility arrears can be recovered through the account; levy arrears go the CSOS or court route.
  6. Apply the criterion to everyone. The first time a trustee’s or director’s own unit is exempted, the rule becomes a target.
  7. Access. A sub-meter on common property can be changed without entering the unit. One inside the unit or on the owner’s erf needs the occupier’s cooperation. A common-property metering kiosk avoids the problem.

Where a scheme runs prepaid this way, the conversion happens on a meter that is already installed, the resident tops up from their phone, and every future utility charge is paid before it is consumed, without a trustee or director ever deciding who gets cut off. That is the outcome a scheme should be aiming for: the question “who do we cut off” stops existing.

Frequently asked questions

Can we put just one owner on prepaid? Yes, in all three schemes. Use a criterion-based decision rather than naming the unit.

Does the owner have to agree? No. A valid special resolution (sectional title) or an authorising clause in the MOI, use agreement or rules (share block, HOA) binds the owner or member. Consent is not required for the change of meter type.

Do we need a court order to switch to prepaid? No. You need a court order to disconnect, block or restrict supply for arrears. Changing the meter type under valid authority is not a disconnection.

Can the prepaid meter be set so arrears must be paid before it works? No. CSOS lists that as an unlawful practice and orders meters unblocked.

Who pays for the meter? Your resolution or rule decides. In Eagle Breeze CSOS ordered the body corporate to install the meter at its cost, noting the cost could be debited to the owner’s levy account.

What about tenants?

  • Share block: A member who lets their unit still owes the levy. Give the occupier the same notice as the member. A rent-diversion order under section 39(1)(f) can redirect the rent to the company.
  • Sectional title: PMR 29(5) protects tenants’ Rental Housing Act rights. Give occupiers the same notice as owners, and consider a rent-diversion order for the levy arrears.
  • HOA: Give the occupier the same notice as the member. Rent diversion is available in the same way.

Does this apply if the municipality meters the units directly? No. The scheme can only change meters it owns. Municipal meters follow the municipality’s credit control policy.

What about water? Same rules as electricity. PMR 29 covers water, electricity, gas and other services in the same way, and CSOS’s unlawful-practices list names water alongside electricity. The same thresholds and the same prohibition on disconnection apply.

Sources

About this article and a note on legal advice

GridAI builds digital utilities: technology that solves the biggest energy and water problems in estates, housing complexes and other shared-metering environments: fair billing, prepaid utilities and the data behind them. We also work in commercial environments such as pump stations and water treatment facilities, where our contracts are based on volumetric flow. We are a full-stack engineering team, with civil, electronics, electrical and software expertise in-house. This article records our understanding of the law as at 5 November 2026 and the sources we rely on.

It is not legal advice. The rules of your scheme, the wording of your MOI or use agreement, and the facts of a particular owner’s account all matter. Before serving a conversion notice or passing a resolution, have a community schemes attorney check it. CSOS also offers free guidance: csos.org.za.

If your scheme is losing money to non-payment and you want prepaid utilities that settle automatically, fairly and without a trustee or director ever having to decide who gets cut off, talk to us: info@GridAI.co.za.