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SECTION 118(1) and 118(3) OF THE LOCAL GOVERNMENT:
MUNICIPAL SYSTEMS ACT 32 OF 2000

 

Over the last number of years there have been three primary contentious issues raised in our courts regarding the liability for rates, taxes and service charges on immovable property and the issuing of rates clearance certificates by local authorities in terms of the above-mentioned sections

  1. Liability of owners for the arrears of tenants
    On 6 Oct 2006 our constitutional court in the final instance ruled in three cases concerning the constitutionality of section 118(1) of the Local Government: Municipal Systems Act 32 of 2000, that the provisions of section 118 do not fall short of our constitution and that the section does not result in an arbitrary deprivation of property that infringes on section 25(1) of the constitution
    Therefore owners are at risk and will be required to settle tenants arrears in order to get a rates clearance certificate in terms of section 118(1) of the Local Government Municipal Systems Act

  2. Liability for debts to the council beyond the 2 year period provided for in section 118(3) of the Municipal Systems Act
    Whereas sec 118(1) effectively places an embargo on the transfer of immovable property until the council has obtained payment of all amounts owed to it for a period of two years prior the application for rates clearance, section 118(3) determines that an amount due for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is owing and enjoys preference over a mortgage bond registered against the property.

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