The recent case of EM and EM Engineering (Pty) Limited v KwaDukuza Municipality and Others (9349/2014)  ZAKZDHC 55 (26 June 2015) concerned the liability for rates over newly subdivided land.
The property owner and developer EM and EM Engineering (“developer”) registered a general plan which subdivided their property (“the mother property”) into ninety-one subdivisions.
A dispute arose between the developer and the KwaDukuza Municipality (the “Municipality”) when the developer applied for a rates clearance certificate from the Municipality in order to transfer two subdivisions from the mother property to a third party.
The developer, through its interpretation of section 118(1) of the Local Government: Municipal Systems Act 32 of 2000 (“the Act”), contended that a rates clearance certificate is required only in respect of the two subdivisions of the mother property being transferred.
The Municipality was of the view that on the basis that the two subdivisions still formed part of the mother property, the rates and charges payable before a rates clearance certificate can be issued are those rates and charges relevant to the mother property as a whole.
The developer submitted that if the Municipality’s view was adopted, all rates and charges due in respect of the mother property must be paid on each occasion before any transfer of any individual subdivision was allowed.
The court when considering arguments from the developer and Municipality held that:
Therefore the court held that a rates clearance certificate need only be issued in respect of the subdivision/s being transferred and not the mother property as a whole.
Junior Associate in the Commercial Department at Garlicke & Bousfield Inc
For more information contact Dylan on telephone : 031 570 5439, email: firstname.lastname@example.org
NOTE: This information should not be regarded as legal advice and is merely provided for information purposes on various aspects of property law.