Joburg ratepayers earn victory over council

Court rules in favour of cut in residential rates in multi-purpose buildings

HE CITY of Joburg, already battling financially, has been dealt another blow. A court has ruled that it has been illegally applying commercial rates to residential buildings that have a few shops on the ground floor.

Commercial rates are three times higher than residential ones.

In a judgment handed down this week by the Johannesburg High Court, Judge Moroa Tsoka ruled against the City of Joburg, which had attempted to overturn

Tthe Valuation Appeal Board’s decision that two blocks of flats in Hillbrow, which have nine storeys of flats and ground-floor shops, should be categorised as “multiple purpose”.

Such a categorisation, the court found, meant that the rates applicable should be apportioned accordingly.

The Valuation Appeal Board found that the buildings, called Park Mews, in Catherine Street, Hillbrow, should be paying 80 percent residential rates and 20 percent business rates.

According to the council, the residential component’s value in one building is R156 300, with the business section valued at R13 700, while in the second building, the value is R259 000 for shops and R2.9 million for the residential sector.

Yet, the council was levying business rates equally for both components. It had argued that although 80 percent of the building was residential, this should be ignored.

Judge Tsoka found that section 9 of the Local Government: Municipal Property Rates Act states that “a rate levied on a property… used for multiple purposes must be determined by… applying the rates applicable to the categories determined by the municipalities used for those purposes to the different market value apportionments”.

Costs were granted against the council, and Judge Tsoka refused it the right of review, saying “the interpretation, which appears to be unpalatable to the applicant, does not give the right to review proceedings”.

The Property Owners’ and Managers’ Association said it welcomed the judgment.

Chairman Renney Plit said it was a victory for owners and tenants.

“Being charged three times more for rates has been a burden which we have had to pass on to our tenants. It was an unfair charge because in some instances there are 500 flats and only four shops downstairs, but everyone was being forced to pay the higher rates,” he said.

Plit said the cost reduction would be passed on to the tenants once it was ascertained that the council would, in fact, abide by the court’s decision and lower all the rates in affected buildings.

“We have been arguing this case with the council for years as there are many buildings in the CBD which are affected, but our pleas have fallen on deaf ears. Hopefully, they will listen now that there is a court ruling.”

The property owners would be deciding whether to institute a claim for back-payments.

“The sad part of all this is that the council is using ratepayers’ money once again to fight against them,” he said.