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The S118(3) Monster - I

11 February 2016

On 29 January 2016, the Supreme Court of Appeal ruled in the matter between City of Tshwane Metropolitan Municipality v PJ Mitchell (38/2015) [2015] ZASCA 1 (29 January 2016) that the Municipalities may, in certain limited circumstances, hold new owners liable for old owner’s debts. This may have major repercussions for property owners, sellers, attorneys and the entire property industry as a whole. The Banks may be at risk as their security may be affected.

We believe that this is fundamentally unfair and have been fighting “tooth and nail” against this in the Courts. Our matters that are before the Courts address the Constitutional issues that were not argued in the Mitchell matter and they are scheduled to be heard in the North Gauteng High Court on 22 February 2016.

Our advice is as it always has been: Ensure that all debts to obtain a Clearance Certificate [in terms of Section 118(1)] and all Historical Debts [in terms of Section 118(3)] are carefully scrutinised and settled in FULL before a property is transferred. This will prevent the new owner from being faced with this dilemma.

Peter Livanos

Full judgment and see The S118(3) Monster - II

Reader Comments: 1
MARK SCHAFER 11/02/2016:

This is the second SCA judgment where the majority judgement was wrong and the minority judgement correct. The previous one made the PIE Act applicable to tenants with leases - and look where that left us. Perhaps all judges should be obliged to write their own judgements

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