New home owners can no longer be held liable for historical municipal debts incurred by the previous home owner after transfer of ownership took place. This is according to a ruling made by judge J D Fourie in a case which served before him on 8 September that the debt previously held by the metro no longer existed with the transfer of property from one owner to another and, subsequently, the new owner cannot be held responsible for the previous owners debts owed to the municipality.
Faced with historical debts, sometimes running in thousands of rands, Tshwane municipality welcomed any means whereby such debt could be recouped. In accordance with the metro’s interpretation of Section 118 (1) and (3) of the Municipal Systems Act (MSA) the metro vigorously enforced their right to collect taxes in arrears. The ruling in the Tshwane Metropolitan Municipality vs. Mathabathe case in May last year was used as a further motivation in its endeavour to collect outstanding debt older than two years from the new buyer of a property.
Based on this judgment, the prospective new owner, refusing to pay the debt incurred by the former owner, was virtually blackmailed by the metro in refusing the new owner a consumer agreement which entitles him to receive municipal services such as electricity supply, water or refuse removal.
Mandy Mitchell, a lawyer, pointed out that from this judgement it was clear that the metro has taken paragraphs of the verdict out of context and based its action on a misinterpretation.
”We have numerous cases of people objecting to the municipality’s insistence that they should pay the previous owners’ debt. Each time when we take this matter to court the matter is settled with cost in favour of our applicants. However, the verdict of judge Fourie is to serve in Bloemfontein’s’ Court of Appeal. The matter at stake regarding this, is only section 118 (1) and (3) of the Municipal Systems Act (MSA),’’ he said.
He added that the recent judgement confirmed that there is nothing in the bylaws which makes the new owner liable to pay the debt of a previous owner.
”Even if we presume that they have these rights, they are executing it unlawfully because of the fact that they don’t have the appropriate court order to execute the statuary hypothec. Therefore their actions are unlawful. They are making a smokescreen about the statuary hypothec which is the real right of security,’’ he said.
Judge D S Fourie ruled that the lien previously held by the metro ceased to exist with the transfer of property from one owner to another and, subsequently, the new owner cannot be held responsible for the previous owners debts owed to the municipality. However, the judge did make the remark that there should be made a difference between private and public execution of a sale and the principle and secondary debtor, as this effects the statuary hypothec which is the real right of security for the performance of a debt.
Andrew Bembridge of Edward Nathan Sonnenberg said that with this ruling, new home owners who had no other choice but to pay up for the debts incurred by the previous owner, should now be refunded by the municipality.
This is also the viewpoint of the Democratic Alliance (DA) inviting any Tshwane residents who are affected by the historical debt ruling, by offering assistance to recoup money unnecessary paid to the municipality.
”The recent ruling has corrected the misconception that homeowners are liable for a previous owner’s unpaid municipal debt. It also prevents the city now from refusing to connect services for the new property owners where this debt remains unpaid. The City of Tshwane now has a responsibility to refund those persons who have been subject to this unjust requirement prior to this ruling,” Adriana Randall, MPL, said.
She added: ”Affected members of the public are urged to contact me with their request for a refund and details of their particular case by emailing: adrianarandall@lantic.net.’’
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