Beachfront timeshare owners still face double rates

OWNERS of units in beachfront timeshare buildings in Durban and Umhlanga will have to continue to dig deep into their pockets to pay doubled rates following a Durban High Court ruling that the city is entitled to charge them commercial, not residential, rates.

But owners in Breakers – which is spearheading the legal challenge – are determined to fight on and intend taking the decision on appeal.

Owners were hit with the massive rates bills last year after the city changed their “rating status” in its revised rates policy by amending the definition of “residential property” to excluded properties used for “the supply of commercial accommodation”.

Breakers, which the city values at almost R240 million, launched the court application seeking an order declaring that it be categorised as “residential” or, failing that, a “multi-use property” after it was presented with a rates bill that was double.

In his affidavit, company secretary Ian Hume said Breakers consisted of 77 apartments falling under a conventional share-block scheme, many of which were primary residences, and 80 apartments in a high-rise building under a timeshare scheme through which people bought shares in exchange for a right of occupation for one week.

He denied that Breakers was a commercial venture, saying “we do not supply board and lodging”.

The city opposed the application.

In his recent judgment, acting Judge Vusi Nkosi said the eThekwini Municipality had the right to amend its rate policy and Breakers had not challenged the actual process it had followed. “I have no reason to doubt that the amendments were carried out with due compliance to the relevant provisions of the act, including the requirement of community participation,” said Judge Nkosi.

“I assume that comments and objections received from members of the community regarding the amendment to the definition of residential properties were dealt with during this participation process.

“Based on the amendments, Breakers was re-categorised as ‘business and commercial’ and notice to this effect was sent to it.”

On a technical point, the judge found that Breakers had brought the application prematurely because it had not invoked or exhausted its internal remedies and could have lodged an internal objection.

But he also dismissed the application on its merits, saying the timeshare and business components on the property accounted for 46% of the total floor area and this effectively excluded it from the “residential” definition.

Attorney David Randles, who acts for Breakers, confirmed that an application for leave to appeal had been filed.