Court orders Tshwane metro to refund thousands of ratepayers

The financial woes of the Tshwane metro have deepened after a group of residents earlier this month won their fight to be refunded unlawfully charged property rates dating back to 2011.

The Pretoria High Court issued a declaratory order for the capital city to put all affected ratepayers in the same position they would have been but for the unlawful action by the administration, and to do so within 90 days.

The metro could not indicate the number of ratepayers affected or the amount of money at stake as it is still studying the ruling, according to spokesperson Lindela Mashigo. It may also consider an application for leave to appeal.

Henri du Toit, chair of the WeCanWin initiative (the applicant in the latest court matter), estimates that at least 5 000 ratepayers are now entitled to either refunds or credits on their rates bills.

It may amount to more than R1 billion, he says.

Lex Middelberg, a Tshwane council member who has supported the action since 2011 – first as Democratic Alliance (DA) councillor and now as founder and representative of the Republican Conference of Tshwane – estimates the number of affected ratepayers at 8 000 and the amount at stake close to R2 billion.

Liquidity crisis

This comes as the metro is battling a severe liquidity crisis. Despite improved collections, it is battling to pay Eskom on time and mayoral committee member for finance Peter Sutton recently stated that it may take three years to stabilise the metro’s liquidity.

The court order pertains to a change in the categorisation of the affected properties for the assessment of property rates.

They had been assessed as residential property by the former Kungwini and Nokeng tsa Taemane municipalities up to 2011 when these areas became part of the Tshwane metro, then under ANC rule.

At first the owners did not see much change in their rates bills, but were shocked in September 2012 when their monthly rates bills increased by about 700%. In one example, a family saw an increase from R843.43 per month to R6 014.00.

To add insult to injury the increase was to be retrospectively implemented from July 2011.

The reason for the increase was that the City of Tshwane changed the categorisation of the properties from residential to vacant land, which is subject to a much higher tariff.

This was however done without notice to the affected owners and they were never consulted on the matter.

Residents, with the support of the DA (represented by Middelberg, among others) started fighting the matter. The Lombardy Estate and Spa won a court order declaring the valuation role that effected the category change to be unlawful and invalid.

The effect was that the metro was compelled to refund or credit the Lombardy property owners.

This ruling came shortly after the DA took over the city government following the municipal elections in 2016.

Changing its position from when it was in the opposition benches, the DA-led administration decided to appeal the Lombardy ruling, but the appeal was later dismissed.

The 350 members of WeCanWin were in exactly the same position as the Lombardy owners, but the metro failed to respond to their enquiries in this regard.

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WeCanWin therefore approached the high court for a declaratory order, and the court not only clarified that the members of WeCanWin must be refunded or credited, but that every other affected current property owner or owners at the time who have since sold their properties must be too. This includes interest.

Du Toit says the owner of one of the WeCanWin properties he has knowledge of is entitled to a R150 000 refund.

If every member of the organisation is entitled to the same amount, the metro would be out of pocket to the tune of R52 million.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.