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PROPERTY DEBTS DUE TO MUNICIPALITIES:
[an Article by listed attorney: Fawzia Khan]
The recent ruling by the Supreme Court of Appeal (SCA) regarding the issue of property debt due to the municipality has far reaching negative consequences, not only for future property owners, but also for the country’s economy as a whole. Social media platforms and group chats amongst attorneys and advocates are abuzz with fervent responses on how to deal with the aftermath of the SCA’s ruling for future property transactions. The effect of the SCA’s ruling in the case of: * City of Tshwane Metropolitan Municipality v PJ Mitchell (38/2015) was that all property owners could potentially be found liable for the historical debts of the previous property owners, going back 30 years. Anyone who has ever bought or sold immovable property would know that one of the key documents in any conveyancing process is the production of a ‘rates clearance certificate’, issued by the municipality. In fact the Registrar of Deeds will not register any transfer without such a clearance certificate. In terms of this certificate, the municipality confirms that all monies for services, rates and taxes for the last 2 years, due to it by the owner have been paid in full.
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* City of Tshwane Metropolitan Municipality v PJ Mitchell (38/2015)
The Court Case can be viewed here: → https://lawlibrary.org.za/akn/za/judgment/zasca/2016/1/eng@2016-01-29