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What utility charges can I pass on to homeowners?
In a land lease community it is common for you to re-supply utilities to residential sites within the community. In these circumstances you may ask homeowners to pay directly for any or all of the following:
- electricity
- gas
- water
- sewerage - only if the local water supplier charges for this separately.
Home owners can be asked to pay for:
- usage charges - this varies depending on how much they use
- service availability charges – that is, as fixed amounts.
Before you can pass on utility charges two things need to happen:
- the use of the particular utility on the site must be separately measured or metered
- the home owner must have agreed to pay the particular charge under the terms of the site agreement. This now a standard term of the agreement.
If a site is not metered, and you want to charge for utilities, you must pay the cost of installing the meter.
If a home owner hasn’t been paying a utility charge and you want them to, you must give at least 14 days' written notice. There would need to be an agreed offset of the site fees. If you cannot agree, an application can be made to the NSW Civil and Administrative Tribunal.
The maximum service availability charge a homeowner can be asked to pay for both water and sewerage service availability is $50 each calendar year.
What are my billing responsibilities?
You must provide an itemised account. This should set out what you are asking the homeowner to pay and how each amount has been calculated. You determine the frequency of the billing cycle.
How do I charge for electricity in a community with an embedded network?
To help you understand this issue, we have created some easy to understand FAQs.
The issue of electricity charging has been the subject of a recent case in the Supreme Court (Silva Portfolios Pty Ltd trading as Ballina Waterfront Village & Tourist Park v Reckless [2018] NSWSC 1343).
In summary, the Supreme Court found that an operator is not entitled to charge a home owner more than the operator has been charged for the electricity consumed by the home owner. This decision aligns with a previous decision made by the NSW Civil and Administrative Tribunal Appeal Panel in relation to the same parties, and clarifies how the electricity usage charging requirements in the Act should be interpreted.
It is important that you act consistently with this Supreme Court decision.
Following the outcome of the Supreme Court decision, residents may also seek refunds for previous electricity charges. Recently, the NSW Civil and Administrative Tribunal’s Consumer and Commercial Division considered a refund for the resident involved in the above mentioned Supreme Court case (Reckless v Silva Portfolios Pty Ltd t/as Ballina Waterfront Village and Tourist Park (No 2) [2019] NSWCAT 59) and determined an appropriate refund in that case.
In determining the appropriate refund, the Tribunal considered several possible methods for calculating the refund, and identified the approach it considered most appropriate. This decision may be of assistance to you in considering how to charge customers in embedded networks, as well as calculating any refunds, if required
If you need assistance to comply with the Supreme Court decision, and to calculate how much to charge home owners for their electricity usage, you may consider contacting:
- your energy supplier,
- an industry association, or
- one of the many businesses that specialise in providing billing and other services to operators of embedded electricity networks.
Please note, this information supersedes and replaces previous Fair Trading Fact Sheets dealing with the same subject matter. It does not constitute legal advice and you should seek such advice independently, if required.
How much time must I give to pay?
When you provide an itemised account, you must give the homeowner at least 21 days to pay the charges.
What receipts are required?
You must provide a receipt for any utility payments made in person. If payments are made by any other method, you only have to give a receipt if you are asked for one. A receipt for a utility payment must include:
- the name and address of the community
- the homeowner's name
- their site number
- the amount paid
- any amount in debit or credit as at the date of payment
- the period covered by the payment
- the date the payment was received.
What if the electricity supply is not up to standard?
If the electricity being supplied to a site by the operator is less than 60 amps, the following service availability charge discount applies:
Level of supply to site | Maximum service availability charge (SAC) |
|---|---|
less than 20 amps | 20% of relevant local area retailer’s SAC |
20-29 amps | 50% of relevant local area retailer’s SAC |
30-59 amps | 70% of relevant local area retailer’s SAC |
Where 60 or more amps are capable of being supplied, a homeowner is required to pay the full service availability charge even if the home is not capable of receiving this amount of supply.
Can I charge late fees?
Yes. If a utility bill is not paid by the due date you can charge a late fee. Late fees cannot be more than the local utility provider would charge. Check the local supplier’s website to see what fees they charge for late payments.
What else can I do if homeowners do not pay utility bills?
In addition to, or instead of, charging late fees, you can apply to the Tribunal for an order. The Tribunal can make an order in these situations without a hearing, if both parties agree. This order can be enforced as a debt in the local court. Extra fees and charges could be added if it gets to this stage.
Can site fees be used to cover utility bills?
No. You cannot use money paid as site fees towards the payment of any other charges, including utilities.
Can I charge a fee for reading the meters?
You have the right to enter a site to inspect, read, service, repair or replace any meter but no fee can be charged.
How are disputes over utility bills settled?
If a homeowner has an issue with the amount they are being charged, they should discuss this with you in the first instance. Home owners have the right to ask you to provide them with reasonable access to bills and other documents that relate to their utility charges. If an agreement is reached you may:
- refund the overpayment directly, or
- allow the homeowner to deduct the amount from their site fees.
If you cannot agree, apply to the Tribunal for an order to resolve the dispute.