News / South Africa

Yadhana Jadoo
2 minute read
8 Sep 2017
5:00 am

Property owners who paid historical debt want their billions back

Yadhana Jadoo

The Constitutional Court ruled homeowners are not liable to pay historical debt incurred by previous titleholders.

Picture: Moneyweb

Property owners who were forced into paying off historical debt are gearing up to get their money back, and collectively the figure could run into billions of rands.

This is according to Peter Livanos, managing director of municipal debt specialist New Ventures Consulting and Services – the firm taking on all except one municipality in South Africa that may have acquired these monies.

Livanos claims to have been receiving 60 calls a day in the period following a unanimous Constitutional Court ruling that homeowners are not liable to pay historical debt incurred by previous titleholders.

In a triumphant day for the property market, the judgment upheld a High Court in Pretoria ruling and further declared section 118(3) of the Local Government: Municipal Systems Act of 2000 constitutionally invalid.

Under this section, it provides an amount due for municipal services rendered on any property is a charge upon that property and enjoys preference over any mortgage bond registered against the property.

“I have been receiving calls nationally and it is happening daily. A lot of people have suffered for this,” Livanos said.

“We are going to be recovering everyone’s unlawfully claimed money by municipalities, with no up-front costs.”

He added that his firm would only charge a fee if the case was successful and the money recovered. Already in eThekwini, KwaZulu-Natal, his firm was looking at a large volume of work, Livanos said.

“The amounts could run into billions and I told the municipalities that.”

He added that the only municipality not on his list of 257 is the City of Johannesburg, which abandoned recovering historical debt by new owners two and a half years ago.

“Justice will be served. Unjust money must be recovered, whether they have it or not. I warned municipalities that they were placing themselves at major risk.

“Some municipalities could go bankrupt, but that is not the public’s problem.”

Officials who forced new homeowners to pay up should also be held to account, he said.

“They are rogue officials and must be taken to task.”

Livanos, who initially spoke of a class action to recover the cash, said this would now not be necessary as his firm planned to take on each case individually.

Those who may not have paid under protest are also entitled to reclaim, he said. SA Local Government Association spokesperson Tahir Sema said they would abide by the ruling.

“We will work with municipalities to ensure the ruling is implemented and understand what’s required from them,” he said. –