Landmark ruling on rates arrears

THE fact that municipalities are allowed to go after new property owners or tenants to recover rates and taxes left unpaid by the previous owners has been a point of contention for some years now.

But finally, thanks to a landmark court ruling, countless innocent owners and tenants saddled with someone else’s municipal debt have been thrown a lifeline.

The Herald’s sister paper The Times reported yesterday that the Pretoria High Court has declared a section of the Local Government Municipal Systems Act constitutionally invalid.

The section is the one in which home and business owners, as well as tenants, can be held responsible for previous owners’ arrears.

Refusal to pay inherited debt could either result in the municipality refusing to connect new homeowners and businesses, or cut off their services.

It is a huge relief that a law widely viewed as grossly unfair, and one that has resulted in heartache for so many, has finally been successfully challenged.

It is simply wrong that a new owner should be punished because of a previous owner’s non-payment, or because a municipality’s debt collection process has not been up to scratch. Shockingly, some of these debts go back as far as 30 years.

The issuing of a municipal rates clearance certificate confirming that all amounts due have been paid is meant to prevent this kind of situation. But, because so many municipalities are hopelessly behind on their book-keeping, nasty surprises can crop up even after a property has been transferred to a new owner.

The implications of this week’s ruling are huge. For instance, lawyers believe those who had previously fallen foul of the law might be able to claim back the money they had paid to clear a previous title holder’s debt.

On the downside, this could be a nightmare for some municipalities already grappling with massive debt.

Municipalities urgently need to explore fairer and more effective ways of collecting outstanding rates and taxes.

There can be no justifiable reason why debt cannot be collected from a seller as soon as a property sale goes through.