Umhlanga block loses rates battle
AN UMHLANGA share block property has lost a lengthy legal battle with the eThekwini municipality over the property’s rates bill being almost doubled.
The Supreme Court of Appeal has ruled that there was nothing procedurally wrong with a valuation notice that the municipality issued to inform the building management that the rates category had been changed from residential to “business and commercial”.
Breakers Share Block Limited first took its case to the Durban High Court in 2014 after it and several other uMhlanga share block and timeshare properties had their rates categories changed.
The rates category was changed in 2013 when the city amended the definition of “residential property” to exclude properties used for “the supply of commercial accommodation”.
But the case was dismissed in the high court last year when the city argued that the company had failed to exhaust all internal remedies to deal with its complaint, including lodging an objection with the municipal manager.
The Mercury reported at the time that Durban High Court Acting Judge Vusi Nkosi also said in his judgment that even on its merits, the case should be dismissed as the amount of total floor area used for timeshare and business uses excluded it from being categorised as residential.
Breakers apartment block, which the municipality valued as having a market value of R239 million, has apartments that are part of a share block scheme and others that are part of a timeshare.
In their papers before the high court, the company denied that the new rates category was correct and said even if the timeshare was rated as commercial, the rates category should be “multiple use”. The company also said it only realised that the rates category had changed when it received its rates account, which was up by 100% on the previous year. The city had argued that it was within its rights to change the rates category and claimed that the property was advertised as a “holiday resort” on its website.
The case before the SCA was only regarding the validity of the valuation notice that had been sent by the city to inform the company that the rates category had changed.
The company argued that the valuation notice was invalid and therefore the municipality could not demand increased rates based on it.
The company said the valuation notice should have drawn attention to the new rates category that had been given to the property.
But the appeal court ruled that the notice had substantially complied with the requirements in the Rates Act and dismissed the appeal.