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Send  Share  RSS  Twitter  16 Jul 2010

PROPERTY: SAPOA Takes Legal Action Against City Of Johannesburg

 





Recent Gauteng Business News

SAPOA’s (South African Property Owners Association) High Court Application to overthrow the City of Johannesburg’s 2010 budget stems from SAPOA’s objection to COJ’s large rates increases which were included in the budget without consultation or due process. In addition, these increases unfairly target commercial property owners.

Since SAPOA took the matter up on behalf of its members, the association – which represents the voice of the industry – has steadily escalated the issue, moving from an attempt to negotiate with the COJ, to full legal action, and this finally elicited a response from COJ, which essentially acknowledges the problem and attributes this to a lack of skills and knowledge.

SAPOA’s latest move – a replying affidavit on 18 June – provides a sobering view of the extent of the problem. This lists COJ’s admission that it realised too late that rates would need to be changed. Here, SAPOA maintains that if COJ had acted responsibly and served the community seriously with its mandate, the shortfall would not have occurred or would have at least been anticipated long before it manifested for the first time.

Tsakane Shilubane, SAPOA Legal Manager says: “The affidavit also states that SAPOA aims to facilitate a manner to reimburse discriminated property owners and compel the COJ – with its massive outstanding debts of R6.2 billion - to get its house in order and not unjustly target business property owners.”

He adds that it is unfortunate that when faced with a shortfall in budget, the COJ does not try to recover outstanding debt that has accrued and to which it is entitled. “Rather, the COJ tries to resolve this by placing an additional burden on those who regularly made payment to the COJ. The only conclusion to be drawn from this conduct of the COJ is that the owners of business properties are considered as soft targets who can pay for and finance the COJ’s inability to recover its own outstanding debt.”

It is also clear that the incorrect valuation of properties is the root of the problem. Shilubane adds that “fundamental to the imposition of and the recovery of rates on immovable property, is the valuation process and the municipal value placed on the property.

“Property owners have a substantial interest in properties being accurately valued. The reduction in the values of a large number of properties, following the objection process to the valuation roll, as well as the fact that a large number of business properties have been undervalued, has at its very heart the failure of the municipal valuer to do his work in a responsible and professional manner. The shortfall that manifested itself stems from here.”

It is SAPOA’s case that the main complaint relates to an additional 18% rates and taxes aimed at business properties. Shilubane says, “This offends the principles of equality in circumstances where the undervaluation of various other properties is the very origin (reason) for the deficit.”

SAPOA’s argument is clear - the COJ should rather address and remedy the cause of its problem than merely and unfairly treating the symptoms.


 
 
 
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