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Guide · Electricity

What can a landlord charge for sub-metered electricity?

By Chris Rencken · Last reviewed 17 October 2026

Electricity resale is subject to regulatory requirements, municipal by-laws and the tariff arrangements that apply. In some municipalities, a tenant must not be charged more, or on less favourable terms, than the tenant would pay if the municipality supplied it directly. The right comparison depends on where the building is, how it is connected and which tariff applies, and your lease sets out how electricity is recovered from you.

How sub-metered electricity works

In many multi-tenant buildings, the municipality or Eskom supplies the whole building through one bulk meter, and the landlord recovers the cost from each tenant through a sub-meter. The landlord is then reselling electricity, so resale rules may apply alongside your lease.

The national reference point is NERSA's Guidelines on Electricity Resale. They name shopping malls and commercial buildings, including offices, among the places where electricity is resold (clause 5.3), and say that:

• resale rates and tariff structure must be identical to the approved tariff that would have applied had the customer been supplied directly, in line with the national Electricity Pricing Policy, which requires terms and tariffs not less favourable than the licensed distributor's (clause 8.3);
• a reseller may not recover the cost of running its own electricity business through electricity charges (clause 8.4);
• no additional costs, such as meter reading, vending, billing or compliance services, may be recovered, because these are already included in the tariff (clause 8.5);
• the reseller must explain its tariffs so that customers can check their accounts (clause 8.1), and bills should show the kWh used, the tariff per kWh, the billing period and the total (clause 6.1).

Two points are easy to miss. First, the guidelines accept that a landlord may earn a margin between the bulk tariff it pays and the end-user tariff it charges (clause 8.2); the limit is the end-user tariff, not the landlord's cost. Second, they define a reseller as an owner whose core business is reselling electricity (clause 5.2), and exclude some landlords, for example where electricity is included in a fixed rental with no profit, or where an owner rents at one site with no intention of expanding electricity sales (clause 12). Whether the guidelines apply to your landlord can therefore be a question in itself. An excluded landlord still cannot charge whatever the lease says: electricity legislation, municipal by-laws and tariff conditions continue to apply.

The guidelines describe themselves as interim principles until licensing regulations are completed (clause 13.1), and how they apply to a particular lease is a legal question. Treat them as the regulatory reference point, not as a blanket rule that every administration, metering or infrastructure charge is unlawful. Municipal by-laws and your lease apply in any event.

Some municipalities also set rules in their by-laws:

• Cape Town. The Electricity Supply By-law says the tariff and conditions for resold electricity must not be less favourable to the purchaser than if the City supplied it directly (section 20(4)), and that resellers must provide monthly accounts at least as detailed as the City's (section 20(5)).
• Johannesburg. The electricity by-laws require resold electricity to be measured through an approved sub-meter, and say the seller's charge may not exceed the charge determined by the council (section 17).
• eThekwini. The municipality's published tariff booklet discusses privately managed metering arrangements: an owner may agree with tenants how the monthly electricity cost will be determined, and may use a registered private metering service. The municipality's 2026/27 tariff tables set out its approved electricity tariffs but contain no specific rules on resale. The applicable municipal by-laws, approved tariffs, national regulatory framework and lease must all be considered when evaluating a particular resale charge.
• Buffalo City. Its 2026/27 tariff book has flat-rate tariffs for bulk-supplied complexes where electricity is resold, and a penalty for reselling without a licence or approval.

Other municipalities have their own by-laws. Check the current by-law and tariff schedule for your building's area.

What an electricity bill can contain

Depending on the tariff, a bill may include an energy charge per kWh (sometimes split by time of day or season), a fixed charge, a demand charge per kVA for larger connections, and VAT. eThekwini's 2026/27 commercial time-of-use tariff, for example, has peak, standard and off-peak rates for two seasons, plus service and demand charges.

Municipal tariffs usually change on 1 July each year; for 2026/27, Johannesburg approved an electricity increase of 8.63%. A rate that was right last year may be wrong this year.

Worked example (illustrative)

The figures are fictional and match the TenSure sample report. The example compares energy charges only, at a single flat rate per kWh; other tariff components must be checked separately. It uses the consumption shown on the statements, without independently verifying the meter readings.

The tenant's lease allows the municipal tariff plus 5%. The municipal tariff for the period is R3.20 per kWh, so the lease allows R3.20 x 1.05 = R3.36 per kWh. The tenant is billed R3.95 per kWh.

• Excess: R3.95 less R3.36 = R0.59 per kWh
• Consumption over 24 months, as billed: 43,200 kWh (about 1,800 kWh a month)
• Total: 43,200 kWh x R0.59 = R25,488

This tests the rate billed against what the lease allows. Whether a 5% loading is itself permissible under the resale rules for the building is a separate question, which a review would raise with the client.

What to check

1. The tariff. Does the rate you are billed match the applicable municipal tariff for your category, for each tariff year? Check the July changes.

2. Extra charges. Are there separate charges for meter reading, vending, billing or administration? Where the resale guidelines apply, they say these should not be added; your lease and the local by-law may say more.

3. Readings. Are readings actual or estimated, and are estimates later corrected? For larger connections, is any meter multiplier applied correctly?

4. Common areas and losses. Check whether common-area electricity is separately identified, how the amount is allocated, and whether that treatment complies with the applicable resale rules and your lease. NERSA's resale guidelines also address the disclosure and allocation of common-area consumption (clause 6.6).

5. The bill itself. Does it show enough detail to check: kWh, rate, period and total?

If you have a concern

The resale guidelines set out a route for complaints: raise it with the reseller (your landlord) first, then with the municipality or Eskom as the licensed supplier, and then with NERSA (clause 11.1). Put your query in writing and keep copies.

Documents to request

• Twelve months of statements showing readings, kWh and rates.
• The landlord's municipal or Eskom bulk account for the same months.
• The applicable municipal tariff schedule for each tariff year.
• The electricity clause in your lease and any metering agreement.

Want your electricity charges checked?

A TenSure Check compares the rates you are billed with the applicable tariff, using the consumption shown on your statements, and tests any additional charges against your lease. Start with a TenSure Check or see a sample report.