Municipality set to clamp down on businesses defaulting on rates
THE Ndlambe Municipality will begin clamping down on commercial properties that have not been paying rates.
Two of the properties in the public eye are the Kowie Swim and Play Centre, which incorporates other business tenants in addition to the indoor swimming pool, and the Goodwill Centre in Campbell Street, a former community hall which recently leased the property to a hairdresser.
Ward 10 councillor Ray Schenk investigated the rates situation at both properties.
On the indoor pool centre he said, “I am surprised that this issue has taken so long to resolve. The lease agreement was signed in 1998. When I was made aware of this issue I immediately put the wheels in motion to resolve this anomaly. The indoor pool is not a standalone building on the erf. There are other buildings on that erf.”
When TotT did a story on the indoor pool centre last year, we went through the lease agreement, which is valid for 99 years from September 1 1997.
The rental payable to the municipality is only a nominal R1 a year. The benefit to the municipality in leases like this is that the property, with improvements, reverts to the municipality at the end of the lease. But 99-year leases are rare.
A significant clause in the lease brought to TotT’s attention, is that in addition to the nominal rental, the lessee is responsible for payment of rates and taxes on the property, “assessed on the same basis as if the property was owned and registered in the name of a private person rather than in the name of a local authority”.
Yet no rates have been paid. Lease-holder Hennie Nel told TotT he was not required to pay rates and taxes because the property was recreational.
At the time, the municipality was unable to tell TotT if any rates were being levied.
More than a year later, municipal spokesman Cecil Mbolekwa said the municipality was finally addressing the issue.
“Both lessees leasing on erf 3935 will be treated the same and in line with the lease agreement signed with the respective lessees,” Mbolekwa said. “The payment of rates and taxes will be dealt with in line with the communication we have with the respective lessees.
Another property in the spotlight is the Goodwill Centre, which was previously used as a community centre leased by various groups for dance classes, karate and Alcoholic Anonymous meetings, as well as providing tea and coffee for elderly residents shopping town.
Several residents expressed consternation when the premises were leased to a hair salon recently.
Schenk said the Goodwill Centre had until recently been under the care of the Port Alfred Benevolent Society and was rebated in accordance with the relevant policy. “I have made the recommendation that it be revalued as a business property,” he said.
Kevin Heny, who heads the Benevolent Society management committee, said it was “purely a commercial decision” to lease the building to a hair salon.
“Originally it was for Damant Lodge residents stopping for tea in town, and we’ve had various little groups using it. We weren’t getting enough community use and so little money was coming in. So rather we get money to benefit some, in this case Damant Lodge.”
He said the rental income was going to Damant Lodge, which is the core of the Benevolent Society’s work.
He said the lodge had had a tough year, operating at a loss, and was keeping the Goodwill Centre afloat.
Asked if there was not a condition when the property was bequeathed that it always be for community use, Heny said the document could not be found, and his mother, Joyce, who knew the history of the building, had Alzheimer’s and was herself a resident of the lodge.
Heny said the property had until now been exempt from rates because of its charitable use and also because of an exchange about 30 years ago when the adjoining plot, also owned by the Benevolent Society, was expropriated to make a parking lot.
“We haven’t been in discussion with the municipality yet, but we probably need to start paying rates and taxes,” he said.
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