In a ground-breaking decision, they said it is because it violates Gauteng Unfair Practices Regulations and amounts to profit the landlord is not entitled to.
The tribunal is responsible for solving disputes between landlords and tenants.
More than 80 tenants at Plettenberg flats in Hillbrow, Johannesburg, who were charged a R385 a month "service charge" by their landlord in addition to their normal electricity charges, will now pocket more than R2.1-million after the tribunal ordered that they be refunded all the money charged since 2009.
This charge was not for electricity consumed at the property, rather for the "service" the landlord, Young Min Chang, claims was provided in delivering the electricity from its connection with City Power to each of the tenants' units.
City Power does charge the landlord a service fee of about R385 a month and the landlord, in essence, passed that charge on to each of the individual tenants. The net effect of this was that the landlord paid City Power about R385 a month in service charges, but charged the more than 80 tenants about R27 000 a month, and pocketed the money.
In a tribunal hearing on May 8 this year the tenants argued, on the basis of Regulation 13 of the Gauteng Unfair Practices Regulations, that there was no basis in law on which the landlord could levy such a charge.
The landlord argued that electricity by-laws and Electricity Regulation Act allowed for the levying of such a charge and that Regulation 13 did not apply because it was superseded by the tenants' lease agreements.
On June 14 the tribunal upheld the tenants' arguments, ruling that the landlord was interdicted from levying the charge in future, and ordering the landlord to repay to the tenants all the service charges levied since May 2009.
The tribunal found that the electricity by-laws and the Electricity Regulation Act precluded the landlord from making a profit from electricity. In terms of the latter act, the landlord would need to have a licence to trade in electricity, which he does not have.
The tenants were represented by lawyers from the Socio-Economic Rights Institute, an organisation that fights for social and economic rights for the poor and powerless.
One of the applicants in the case, Fikile Jele, a tenant who has been living in the building since 1994, said the tenants were "more than ecstatic" with the ruling as it did not just have an impact on them, but on many tenants across the country.
"We faced a lot of threats and intimidation when we started this fight. We tried in vain to negotiate the scrapping of this charge and we could not agree," Jele said.
Tenants in the building showed the Mail & Guardian their electricity bills, which appeared exorbitant and, at times, went as high as R1800 for tenants living in one-bedroom flats, largely as a result of the additional R385, which should have been paid by the landlord to City Power.
Patson Kuza Nkosi, who is a member of the tenants' managing committee, said the committee would inform tenants of the ruling on Friday when it holds its regular meeting.
Jason Chang, who identified himself as one of the owners, said they intended to appeal the judgement.