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Property: SAPOA Responds to COJ Draft Rates Policy


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In a detailed 21 page document, SAPOA, which represents major commercial, industrial and retail property owners across the country, provides detailed feedback to improve the COJ Metropolitan Council’s revised Draft Rates Policy.

Says SAPOA CEO Neil Gopal, “The City of Johannesburg’s apparent limited capacity to process requests timeously has resulted in long delays, particularly with the issuing of clearance certificates. This impacts all stakeholders in the property buying and selling cycle and these procedures therefore need urgent revision.

Tsakane Shilubane, Legal Services Manager for SAPOA says that the Municipal Property Rates Act allows for different categories of rate able property which include ‘privately owned towns serviced by the owner’. “SAPOA is of the view that this category must be incorporated in the revised policy to assist developers and end land owners of such estates who are essentially being taxed twice on the same property. This should allow a different rating and rebate where all services and infrastructure has been independently installed and thereafter maintained by the developers. These include roads, sewage plants, storm water drainage, water and refuse removal.” Under the current COJ policy, these developments are subject to full rates, despite non provision or maintenance and services.

SAPOA’s feedback document to Council also cites the challenge of ‘open market value’ for properties, where council’s ‘mass valuation approach’ has compromised property owners by disproportionate ‘actual values’ attributed to many properties. In some cases valuations have increased by between 1000 - 5000%. SAPOA believes that a Market Value approach should rather be applied.

Adds Gopal, “SAPOA also objects to the fact that property owners who have been issued over-inflated rates have to pay these rates until such time that the objection process has been finalised. We propose that where a new valuation is substantially higher than the previous evaluation, the owner be exempt from paying the new rates until such time that the objection is resolved.”

SAPOA is also concerned with the Council’s delays in handling objections and appeals regarding valuations. “Recent reports suggest that up to 40% of objections were still outstanding, and with Council’s 20 April 2009 deadline, it’s unlikely this will be completed,” says Shilubane.

The issue of multiple purpose usage in sectional title schemes is another amendment that SAPOA welcomes, however Gopal says that owners of sectional Title dwelling units are concerned that commercial property rates, which are higher than residential rates, are being applied, where a mix of commercial and residential accommodation is catered for. “SAPOA believes that in order to be fair, the actual usage should be the criteria to determine the appropriate rate for a property with multiple usage,” he adds.

Although SAPOA welcomes the proposed changes whereby individual owners of Sectional Title units, or the responsible Managing Agent, should apply to the Council for the residential property rates tariff for those sections used solely for residential purposes, there are some concerns. Says Gopal, “SAPOA believes that it is unfair that the re-instatement of the residential rate should only be effective from the date that Council is satisfied the property is used for residential purposes only.”

“Given the challenges proposed by the revised draft, SAPOA is actively working towards being part of a constructive, interactive process to ensure that property owners – both residential and commercial – are served on a fair basis by the provisions of the new Act,” says Shilubane.

As part of its mandate to look after the property rights of its members, SAPOA holds regular meetings with the COJ and has also proposed a meeting with the City to discuss the Draft Rates Policy document and to request that the COJ extend the deadline for comment on business tariffs.

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