Legal Issues

a)      Court Acknowledges the importance of property views (Shepstone & Wylie Attorneys)

A far reaching unanimous judgment handed down on 26 September 2003 by the Supreme Court of Appeal in Bloemfontein which acknowledges the impact that a view has on the value of residential properties, is likely to have major implications for town planning practice across the country. (for the complete document see SAPOA website) 

b)      Court declares By-Law on arrears unconstitutional

East London – The municipal by-law forcing property sellers to pay water and electricity arrears of defaulting tenants before transfer can take place is unconstitutional and invalid.

So said High Court judges Frank Kroon and Eric Leach yesterday in a landmark ruling which has now been referred to the Constitutional Court for confirmation. The long-awaited judgment could result in municipalities countrywide having to repay millions of rands to sellers who have been targeted by Section 118 of the Local Government Municipal Systems Act.

The judgment follows after the sellers of a Quigney house, who has been compelled to pay the bad debts of a succession of tenants before taking transfer, challenged the law.

The matter was driven by the local branch of the South African Property Owners’ Association (SAPOA), which has opposed the law from the outset.

Referring the judgment to the Constitutional Court means municipalities cannot appeal as the judgment is suspended pending the higher court ruling. In terms of Section 118 the Registrar of Deeds was prevented from transferring a property until the seller produced municipal clearance certifying that all amounts due on the property had been paid for the past two years.

Recently Buffalo City municipality also insisted that sellers settle rates arrears of previous owners before issuing a clearance certificate.

Judges Kroon and Leach said in terms of the Constitution an of constitutional invalidity shall have no force unless it is confirmed by the Constitutional Court. “We are uncertain whether a specific order of referral is required but to cover all contingencies and insofar as it may be necessary, we intend ordering that our declaration of constitutional invalidity is to be referred to the Constitutional Court.”

Buffalo City Chief financial director Brian Shepherd said the ruling, if confirmed by the Constitutional Court, would put the city back as far as collections were concerned. “We obviously would have to reconsider our credit control mechanisms, even if it means signing upfront agreements with consumers,” he said.

Attorney Ashley Kretzmann of Bate Chubb & Dickson, who represented the applicants, said the ruling was a positive one for all property owners.

“This section has severe financial consequences for all sellers, not only in Buffalo City but all over the country.”

Extracted from Daily Dispatch, written by Eddie Botha, edited by Boet van Straten