RAG (Residents Action Group) has called on the City of Ekurhuleni (CoE) to halt the implementation of the flawed 2021 to 2025 Ekurhuleni Property Valuation Roll.
Residents have until July 18 to contest their proposed new property valuations.
The NPO believes errors on this roll will result in homeowners (including RDP homeowners) and commercial property owners facing huge hikes in their rates with effect from July 1.
RAG representation said until the complaints, inaccuracies and lack of credibility of the roll, including legal irregularities and non-compliance with the Municipal Property Rates Act, have been addressed, it expects the City use the previous Ekurhuleni Property Valuation Roll.
The organisation pointed out that one political party had already filed a motion in council for the City to extend the period for which the current valuation roll remains valid while the new roll is reviewed.
The motion was dismissed in the City’s council meeting.
The motion brought before the council highlighted several issues with the proposed valuation roll, including the emittance of properties.
Other issues highlighted by the motion was that some commercial property rates would decrease up to 80%, while others would increase by up to 2 615%.
In the motion it was stated a similar trend could be seen in the valuations of residential property values.
According to RAG, RDP houses increased between 50% and 100%, according to the valuation roll.
The group has also said that the motion stated the valuation rolls open for public participation were not signed by the designated municipal valuer and that there was no evidence available on the appointment date of such a valuer.
In the motion, it was also stated Section 49 letters were delivered without CoE GV21 Section 49 notice and the contractor appointed to deliver the letters failed to ensure they were delivered safely, while some letters were dropped at incorrect addresses and properties.
In an attempt to stop the implementation of the valuation roll, RAG has met with legal specialists to plan the way forward.
RAG’s legal action will include calling for a detailed record of the tender process for the outsourced company that undertook the valuations.
RAG understands that Opti and Black Dot JV was the company the municipal valuations were outsourced to by the City.
According to RAG, one query that needs clarity is that the name of one of the company directors is the same as a member of the Valuation Appeals Boards of several local municipalities.
While residents have until June 18 to lodge their objections, objecting also does not mean a financial lifeline.
Residents will still have to pay rates according to the valuation roll from July 1, unless a financial arrangement can be made with the Department of Finance.
“This is not acceptable,” said the chairperson for RAG Marina Constas.
The City, however, has said the General Valuation Roll (GVR) was compiled according to the content of the Municipal Property Rates Action number six of 2004 as amended.
Spokesperson for the city Zweli Dlamini said the valuation roll for 2021 to 2025 was dated July 1, 2020, and will be implemented on July 1.
“Cognisance should be given to the fact that no valuation roll is 100 per cent correct and the act allows for such errors, hence the objection and appeal process.
“At this point in time the valuation roll is at the objection stage as per Section 50 of the MPRA,” said Dlamini.
Dlamini said the compilation of GVR is done through mass appraisal processes.
“This can cause some properties to be undervalued and others over-valued, hence the MPRA allows for objection and appeal processes.”
He said some properties were mistakenly undervalued in the previous roll and this resulted in huge hikes when such properties are valued according to their market values.
“Where property owners believe their properties are overvalued, they should submit the objection form for the municipal valuer to attend to the objections and then deliver the outcome.
“If property owners are still not satisfied with the outcome of objections, they still have another opportunity to appeal the decision of the municipal valuer,” he said.
Dlamini added that when valuing properties, the market value of properties has to be considered and it has to be determined using recent sales as at the date of valuation.
“This means new values can either go up or down. If the property was previously undervalued, that does not mean the municipality cannot align the value with the market just because there is going to be a huge jump in value as compared to the previous valuation roll.”
He added that several methods of valuation were used and the methods used were acceptable by courts in determining values of properties in South Africa.
This included:
• Sales comparable method estimates the market value for a property using recent sales data from other similar properties. This method requires that there is an active market for similar properties. Residential properties, vacant land, agricultural properties and more are valued using this method.
• The income capitalisation approach is used to determine the value of an income-generating property by deriving a value indication by conversion of expected benefits like cash flows and reversion into the value of the property. This method is used for mostly for business, industrial properties (both light and heavy), retail properties such as shopping centres and filling stations and commercial properties including office buildings and hotels.
• The depreciated replacement cost method is used for specialised properties that do not normally exchange hands in the market and cannot be valued using other methods. It is used to value properties such as schools, churches, hospitals, treatment plants and more.
“If a person is not satisfied with the outcome of their property valuation, he or she should follow a legislative process as prescribed by Section 50 of the said Act.”
Section 50 of MPRA states any person may, within the period stated in the notice referred to in Section 49, inspect the roll during office hours.
It further states that on payment of a reasonable fee any person may request the municipality during office hours to lodge an objection with the municipal manager against any matter reflected in, or omitted from the valuation roll.
According to the act, an objection in terms of subsection (l)(c) must be about a specific individual property and not against the valuation roll as such.
A municipal manager must assist an objector to object if that objector is unable to read or write.
In the act it states a municipal manager must, within 14 days after the end of the period stated in the notice referred to in Section 49 (1) (a), submit all objections to the municipal valuer, who must promptly decide and dispose of the objections in terms of Section 51.
The lodging of an objection does not defer liability for payment of rates beyond the date determined for payment.
Dlamini said if an objector is not satisfied with the outcome of the objection (valuer’s decision), the objector is then given another opportunity to appeal.
“Appeals are handled by an independent value adjustment board (VAB) appointed by the provincial Department of Cooperative Governance and Traditional Affairs (COGTA),” he said.
Dlamini added that all valuer’s decisions with 10% change from the GVR value of which no appeal was received for them are subjected to Section 52 reviews.
“Reviews are also handled by independent VAB appointed by the provincial COGTA.”
He said any property owner or appellant that is not satisfied with the outcome of the VAB outcomes, either the appeals or reviews, can approach the High Court.
“The city does not have power over the VAB and cannot challenge the decision of the VAB except through the high court route,” Dlamini said.
