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Municipal Valuations

Attention current property buyers or sellers:
The practice of some municipalities, including Cape Town’s, of holding buyers of a property liable for the seller’s debt to the municipality, such as outstanding rates, electricity or water charges, has been declared unconstitutional by Gauteng’s High Court. This follows a previous judgement that made it possible for municipalities to recover a seller's unpaid services or rates from the new owners - and this as far back as 30 years’ worth of arrears! 

And municipalities do not have the right to withhold water, electricity or other municipal services from the new owners to force them to pay for the seller’s outstanding municipal accounts. So buyers can be free of being held responsible for the unpaid bills of others. Municipalities will have to use normal legal processes to recover debts from the seller.

Municipalities presumably may still withhold a rates clearance certificate from the seller if they are unpaid municipal accounts, which prevents transfer of a sold property to the new owners. This, too, may need to be challenged in court as many municipalities have been taking liberties with residents’ constitutional rights over the years. One question remains: what happens when the seller disputes an account or a revised property municipal valuation and the City drags its feet in resolving the matter? Should the seller be held hostage to the City’s slow processes (resolving a property valuation objection takes typically some 18 months).

November 2016

CIBRA recommend you first read the documents in the Municipal valuation and Rates folder underneath this,  starting with  'Your Properties Municipal Valuation'

Municipal valuation and Rates documents