Litigation: Historical municipal debt ruled unconstitutional


It says the judgment will give relief to home and business owners who have been saddled with years of historical municipal debt, and who have been refused municipal services until the debt had been settled. A seller may not transfer a property unless he has a municipal clearance certificate for the last two years of bills. But older debts – those that arose before the two-year cut-off – became the liability of the new owner. Failure to pay entitled a municipality to attach and sell the property to satisfy the debt.

However, this section of the Local Government: Municipal Systems Act was declared unconstitutional by the High Court. Judge Dawie Fourie said the section unjustifiably limited the new owner’s property rights under the Constitution. ‘Why should a municipality be entitled to visit the sins of a predecessor in title upon innocent third parties,’ he asked. The judgment was the result of five different court cases. One of them concerned a business premises with a historical debt of more than R12m. In another, the applicant had been without electricity since December 2013.

The judge said new owners had no connection to the historical debt. New owners ‘were in no position whatsoever’ to control the indebtedness of their predecessors in title – but municipalities were.

Download: Historical_municipal_debt.pdf Acrobat PDF (3032Kb)



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