Category: Cape Town

8HA PRIME INDUSTRIAL LAND SOLD TO INTERNATIONAL PROPERTY FUND

Presentation1

The new owner will develop an A-Grade Industrial Park further uplifting Blackheath Industria which has experienced a boom phase during the past 10 years.

For further information contact:

Johan Foster

083 581 8944

johan@capeindustrialproperty.co.za | www.capeindustrialproperty.co.za

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Slogans are key elements in advertising campaigns as brand owners hope that the public will associate the slogan with their products or services and, therefore, to their brand. For this reason, the question of protection is of high importance.

What is a trade mark?

A slogan is a short phrase or a sentence that a company uses to identify itself or its products. It identifies the services or goods of one person and distinguishes it from the goods and services of another. An example would be Nike’s slogan, “Just Do It”.

  • Once a slogan has been registered as a trade mark, nobody else can use it, or one that is confusingly similar. If this happens, legal action may result.
  • A trade mark can only be protected as such and defended under the Trade Marks Act, 1993 (Act 194 of 1993) if it is registered. Unregistered trade marks may be defended in terms of common law. The registration procedure results in a registration certificate which has legal status, allowing the owner of the registered trade mark the exclusive right to use that mark.

CIPC administers the Register of Trade Marks which is the record of all the trade marks that have been formally applied for and registered in the Republic of South Africa.

What can be registered as a trade mark?

If you want to register a slogan, you must first consider of the slogan in question serves the purpose of distinguishing the goods/services of one trader from those of another trader.

  • It must not be a customary, everyday phrase that is common for people to use in your field of trade.
  • It can’t be representations of protected national emblems, such as the national flag or a depiction of a national monument, such as Table Mountain.
  • It must not be offensive or contrary to the law or good morals or deceptive by nature or way of use.
  • There are no earlier conflicting rights.

An example of a slogan or phrase that can’t be registered as a trade mark is “24 Hours”, since the expression is reasonably required for use by other traders.  If a phrase like this was trade marked, the owner of the registration would acquire the exclusive right to use this phrase and thereby prevent all other traders from using it, which is unreasonable and therefore cannot be allowed.

Credit:

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Referen

UntitledInnovations and special provisions that apply to sectional title apartments and town houses do not necessarily apply to homeowners’ associations.

This is according to specialist sectional title attorney and director of BBM Attorneys, Marina Constas, who said that it is important to know the difference between the two and how different regulations may or may not affect them.

“The latest buzz words in the property industry are community schemes,” she said.

“The Department of Human Settlements, currently the umbrella body for such schemes, has taken control of their regulation.

“Community schemes include sectional title complexes, homeowners’ associations, shareblock developments, retirement villages, gated estates with constitutions and social co-operatives, which now fall under Section 1 of the Community Schemes Ombud Service (CSOS),” said Constas.

Sectional Titles

While the CSOS Act covers all community schemes, sectional title stakeholders must also consider the Sectional Title Schemes Management (STSMA), where recent amendments have introduced several new innovations.

“These must be understood and embraced by the sectional title industry. However, they do not automatically relate to homeowners’ associations and other community schemes,” said Constas.

Examples include the establishment of a reserve fund and a mandatory maintenance, repair and replacement plan.

“While many trustees manage their buildings very well and have always had buffer funds, an inordinate number find themselves in financial difficulty, with buildings being run from hand to mouth each month.”

“This reserve fund aims to ensure that buildings do not fall into disrepair. A related maintenance, repair and replacement plan is another completely innovation in the STSMA. From now on, the body corporate must prepare a written maintenance, repair and replacement plan which sets out the major capital expenses within the next 10 years.”

Constas pointed out that other important STSMA amendments include the stipulation that any changes to the management or conduct rules of a sectional title scheme must be approved by the chief Ombud after the necessary resolutions have been taken.

“The duties of owners have also been changed. An owner must now notify the body corporate of any change of ownership or occupancy in his unit. In terms of insurance, trustees are now obligated to obtain valuations every three years and owners may not obtain an insurance policy in respect of damage arising from risk covered by the policy of the body corporate.

“On the financial front, the complex’s budget may now include a 10 percent discount on levies if an owner’s contributions are all paid on the due dates.

“There is no longer a reference to an accounting officer in the sectional title legislation. Consequently, all buildings, even those with 10 or less units, must be audited,” she said.

Constas adde that the new concept of executive managing agents has now been included in the rules for sectional title schemes.

“Distinguishable from an ordinary managing agent, the executive managing agent actually steps into the shoes of the trustees and is liable for any loss suffered by the body corporate as a result of not applying care and skill.

“Even pets have been revised in the STSMA legislation,” Constas said.

“Disabled residents who require an assistance dog to reside with them and accompany them on common property no longer need the formal consent of trustees.”

While the STSMA’s recent innovations do not automatically apply to homeowners’ associations, Constas notes that they may choose to adopt certain provisions from the Act.

“So, if I live in a cluster golf estate development, the maintenance, repair and replacement plan does not apply in my scheme unless the scheme has legally adopted that particular rule.

“If I live in a sectional title scheme, the managing, repair and replacement rule automatically applies,” she said.

Community Schemes

The Community Schemes Ombud Service (CSOS) Act, on the other hand, applies to all community schemes.

“The service is there to regulate, monitor and control the quality of all community scheme governance documentation and provide dispute resolution,” she said.

“Whilst the CSOS Act does not specifically talk about a compliance certificate for homeowners’ association rules, the Ombud’s office will be effecting amendments to bring the law regarding registration and rule compliance for homeowners’ associations in line with sectional title schemes.

“In the interim, the Ombud’s service is encouraging homeowners’ associations to send rules in for vetting,” Constas stated.

She added that the Ombud currently has jurisdiction to deal with any disputes in cluster schemes and notes that the Community Schemes Ombud Services levy must be paid by homeowners’ associations whether they are company registered or simply have a constitution.

Constas said that although the Ombud service faced serious challenges in its infancy, great strides have been made, with over 33 000 complexes having paid over monies. Those homeowners’ associations that have not registered with CSOS will be penalised, she said.

“Now that the Ombud’s office is gaining traction, there will be time to augment and improve the provision of services and to flesh out interesting issues in the industry, such as the Air BnB onslaught,” said Constas.


Young man screaming at a woman in car

We live in stressful times, and as our roads become busier and the pressures of modern life mount, expect more and more road rage incidents. YouTube clips of drivers brawling, beside themselves with fury, vehicles forced off the road or tail-ended by apoplectic motorists, shouting, swearing, punch-throwing, windscreen smashing, racial insults – they all make for good viewing stats but what if you are one of the unfortunate victims?

Firstly, you may well have a civil claim for damages – ask your lawyer about your prospects. Both your actual monetary losses and damages for any assault and humiliation could be yours for the suing.

Then, as a recent High Court judgment confirms, reporting the offender to the police can be an effective way of “balancing the scales of justice” – and making a road-rager think twice about doing it again.

A parking lot bust-up… 

  • The incident in question started with the complainant driving “against the direction set out by the road markings” in a parking lot.
  • This incurred the anger of the accused who, according to the complainant, got out of his parked vehicle, angrily accused the complainant of almost causing a collision, tried to throttle him and swore at him.
  • The accused denied these allegations and claimed merely to have asked the complainant if he had a driver’s licence. His evidence was rejected by the trial court, which convicted and sentenced him on two counts –
    • Common assault, for which he was sentenced to a fine of R1,500 or 3 month’s imprisonment (half suspended for 5 years) and
    • Crimen injuria (criminal impairment of another’s dignity), for which he was sentenced to a fine of R3,000 or 3 months’ imprisonment.
  • The High Court, in rejecting the accused’s appeal against his conviction, found his evidence to be so improbable as to be untrue – the State had proved its case to the required degree of “beyond a reasonable doubt”.

…and why the threat of a criminal record is so effective

It’s probably safe to assume that the fine the convicted road-rager must pay is of less concern to him than his resulting criminal record. The problem is that anyone convicted of a crime whose fingerprints have been taken is likely to appear on the SAPS National Criminal Register; and that’s going to pop up at some very inconvenient times, such as during visa applications, credit checks, employment vetting and so on.

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reading word whistleblower office magnifying glass 3d illustration

For many years now the “Whistleblower’s Act” (actually the Protected Disclosures Act or “PDA”) has been providing protection to employees who report unlawful or improper conduct by their employers or fellow employees.

Recent updates to the PDA have extended protection to independent contractors, consultants, agents and workers employed by labour brokers. There is also a new requirement for employers to put in place “internal procedures for receiving and dealing with information about improprieties”.

Reprisals against a whistleblower (in the form of any type of “occupational detriment”) will land an employer in very hot water indeed. For example if the reprisal takes the form of a dismissal, it is “automatically unfair” and that carries substantial risk such as a compensation order of up to 24 months’ salary.

A case of incompatibility or retaliation?

  • An employee of a large organisation came to believe that several of her subordinates’ positions had been re-graded to a lower grade, without their knowledge or consultation, and that this both negatively impacted on their future salaries and distorted the accuracy of the company’s employment equity report. She reported this to her immediate superiors, then to the company’s internal audit department and to senior executives, but received no feedback.
  • Out of the blue she was presented with a termination offer, and when she didn’t accept it she was summarily dismissed for “incompatibility with colleagues”.
  • Her claim for automatically unfair dismissal in terms of the PDA was rejected by the Labour Court, but on appeal to the Labour Appeal Court her claim was upheld and she was awarded compensation of 18 months’ salary, with her employer ordered to pay all legal costs.
  • In reaching this decision, the Court considered several important questions –
    • Was the whistleblower’s disclosure made in good faith, in accordance with procedure, and based on a reasonable belief that it was substantially true? If so, the disclosure is a protected one. Importantly, said the Court, the whistleblower need not prove a factual basis for the belief “because a belief can still be reasonable even if the information turns out to be inaccurate.”
    • Was it reasonable in all the circumstances for the whistleblower to have made the disclosure? On the facts, held the Court, the whistleblower had acted reasonably and the employer’s contention that the dismissal was based on incompatibility was “nothing short of fiction and the only probability is that the appellant’s dismissal was in retaliation for her disclosure of the irregularities in the re-grading process.”

The lesson for whistleblowers

The PDA provides you with strong protections if you follow the correct procedures; just be sure you will be able to pass the tests posed by the above questions.

The lesson for employers

Don’t take action against a whistleblower just because a disclosure is factually incorrect – it is the reasonableness or not of the employee’s belief, and the “good faith” requirement, that you should concentrate on. Make sure also to have a whistleblower policy in place and to tell all your employees about it – not only is that now a legal requirement, but your business can only benefit from uncovering any improper or criminal conduct going on behind your back.

As always, with our labour laws being so complicated, and the penalties for breaching them so severe, take specific advice on your particular situation.

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Divorce and dividing a property concept. Man and woman are signing divorce agreement.

In Suid-Afrika bestaan daar ‘n wanopvatting dat as jy lank genoeg as lewensmaats saamwoon, daar wederkerige regsbeskerming vir die partye is omdat hulle in ‘n sogenaamde “gemeenregtelike huwelik” sou wees.

Dit is nie die geval nie. Ons reg erken nie ‘n gemeenregtelike huwelik nie. Jy kan dus finansieel blootgestel wees indien jou lewensmaat jou verlaat of doodgaan. Die probleem is dat lewensmaats nie dieselfde regte en verpligtinge teenoor mekaar het as wat die geval is met huweliksmaats of persone wat ‘n formele burgerlike verbintenis geregistreer het of persone wat ‘n gebruiklike huwelik aangegaan het nie. In 2008 was daar wel ‘n wetsontwerp bekend as die “Domestic Partnerships Bill” gepubliseer, maar sedertdien lyk dit nie of hierdie konsep enigsinds verder gevoer gaan word nie.

Wat staan jou te doen?

Kom ons aanvaar jy wil nie formeel trou nie, jy wil nie ‘n burgerlike verbintenis registreer nie en jy gaan ook nie ‘n gebruiklike huwelik ingevolge erkende tradisionele voorskrifte sluit nie. Dan moet jy jou regsverteenwoordiger vir advies vra en opdrag gee om die volgende te hanteer –

  1. Met die insette van beide partye moet julle ‘n ooreenkoms opstel om jul saamwoonverhouding te reguleer. Dit moet ten minste jul ooreenkoms met mekaar, jul regsposisie en julle spesifieke finansiële reëlings uiteensit vir die tydperk –
    1. Vir solank as wat die verhouding duur, en
    2. In die geval van dood of in die geval van ander beëindiging van die verhouding. Kom dan voor die tyd met mekaar ooreen oor aspekte soos –
      1. Hoe gaan die partye se bates verdeel word?
      2. Gaan die partye geregtig wees om onderhoud te ontvang of verplig wees om onderhoud te betaal of soortgelyke ondersteuning te bied?
      3. Gaan daar enige finansiële aanpassing tussen die partye wees? Wat as net een lewensmaat werk? Wat as een betaal vir die ander se huisverband of betaal vir bouwerk wat op die ander se eiendom opgerig word?
      4. Wat gebeur met deurlopende verpligtinge soos huurooreenkomste, verbande, mediese dekking en lewenspolisse, maandelikse en ander herhalende betalings wat gemaak moet word?
      5. Enige ander belangrike aspekte wat julle voor die tyd moet reguleer. As daar kinders is, is dit natuurlik ‘n ooglopende aspek wat in detail gereguleer moet word.
  2. Maak seker dat jul testamente op datum is. Is daar voorsiening in jul testamente om die langslewende se posisie te beskerm indien dit in julle geval nodig is? Sonder ‘n testament geld die bepalings vir intestate vererwing. Dan het die langslewende lewensmaat geen aanspraak om te erf nie en ook geen aanspraak om onderhoud van die eerssterwende se boedel te eis nie. Jou testament moet deur ‘n kundige persoon opgestel word. Testamente wat onduidelik of onvolledig opgestel is of wat nie aan die formaliteitsvoorskrifte voldoen nie, gee ongelukkig aanleiding tot dispute en litigasie wat uit die staanspoor vermy kon gewees het.

Die risiko as jy niks doen nie

Sonder die voorgestelde ooreenkomste en sonder die voorgestelde testamente is jy onnodig op risiko. Jy sal geen reg op vererwing hê by afsterwe van jou lewensmaat nie. Indien die verhouding tot ‘n einde kom het jy slegs ‘n aanspraak op bates wat jy as jou eie kan bewys. Ongelukkig is ons hofverslae vol van gevalle waar lewensmaats sonder heenkome gelaat is, selfs waar hulle vir dekades in ‘n saamwoonverhouding betrokke was wat tot ‘n hartseer einde gekom het.

Indien jy in hierdie posisie verkeer, verkry regsadvies oor jou situasie–

  • Is daar enige regsbeskerming vir jou? Daar is sekere wetgewing wat wel voorsiening maak vir lewensmaats – soos onderhoud vir kinders, mediese fondse, inkomstebelasting, boedelbelasting, pensioenfondse, asook beskerming teen huishoudelike geweld om die belangrikste voorbeelde te noem.
  • In gevalle waar ons wetgewing nie erkenning gee aan die gelyke regte  van lewensmaats nie, kan jy die een wees wat probeer om ‘n hof te oortuig dat die wetgewing ongrondwetlik verklaar moet word. Dit is ‘n lang en duur proses om te kies.
  • Jy kan ook probeer om die hof te oortuig dat julle wel in ‘n universele vennootskap met mekaar getree het. Dit is moontlik maar moeilik; selfs al is jy suksesvol is daar geen waarborg dat die hof ‘n 50/50 verdeling sal beveel nie.

Die risiko, koste, onsekerheid, dispute en onaangenaamheid kan grootliks vermy word, indien die partye vanuit die staanspoor ‘n volledige ooreenkoms met mekaar aangaan om hul saamwoonverhouding te reguleer. 

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You sign a two-year lease for a nice little apartment (or a large family house if you have a spouse, 3 kids and a dog) but after 6 months your employer transfers you and you have to cancel early.

“Fine” says your landlord “but you are breaching your lease and I am holding you liable for the remaining 18 months’ rental”.

What are your rights? As is often the case in life, that depends…

Check the terms of your lease

First things first, generally your most important consideration is this: “What does my lease say about termination?”

Most leases specify what happens if you don’t comply with the terms of your lease and our law will generally hold you to your agreements. So if you have agreed to be bound to a two year lease, your starting point should be that you are at risk if you cancel early.

Before you concede anything however, consider the following –

Does the CPA apply?

First step is to decide whether the Consumer Protection Act (CPA) applies to your lease.

The CPA gives its protections to “fixed-term agreement” tenants but only if your landlord is leasing to you “in the ordinary course of business” and it’s unfortunately not yet clear how our courts will interpret that definition in property leasing scenarios. For example, if your landlord is a property investor running a full-on letting business with a whole selection of apartments or houses, you will definitely fall under the CPA. But what about a private home owner who is overseas for a year and rents to you on a temporary basis? Or a pensioner letting out a “granny flat” to boost their retirement income? You can certainly argue that in both cases the landlord is making “a business” of the letting out, but expect your landlord to disagree.

The 20 day notice provision in the CPA

If the CPA does indeed apply, this is the crux: The CPA allows you to give your landlord 20 business days’ notice, at any time, and for any reason.

“Hooray” I hear you shout, “I get off scot free”. But not so fast!

The CPA also allows your landlord –

To recover any amounts still owed by you in terms of the lease up to the date of cancellation, and
To impose a “reasonable cancellation penalty”. The principle here isn’t to punish you by allowing your landlord to, for example, automatically hold you liable for the full remaining period of your lease. The idea rather is to let the landlord recover all actual losses resulting from your early cancellation – rental lost until a new tenant is in place, re-advertising costs, new agent’s fees, new lease preparation costs and so on. Particularly if you are cancelling a fixed-term lease early on, expect to pay for the privilege.

Note that this all applies regardless of what your lease says – you can’t be contracted out of these protections. In other words if your lease imposes a set “early cancellation fee” or the like, it must still be a reasonable one.  Note also that you must give the required notice “in writing or other recorded manner and form” (keep proof).

What if the CPA doesn’t apply?

In this case, you have no specific right of early cancellation and will be bound by the terms of your lease.

But you still aren’t entirely at your landlord’s mercy. Any penalty imposed on you must still be reasonable. Per the Conventional Penalties Act, a court can reduce a penalty if it is “out of proportion to the prejudice suffered” by the landlord.

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住宅模型と暗い背景

Ons weet almal hoe maklik ‘n misverstand of dispuut tussen ‘n huurder en verhuurder kan ontstaan. Dikwels is gesonde kommunikasie of ‘n mate van onderhandeling voldoende om die geskil op te los. As dit nie werk nie kan ‘n onafhanklike tussenganger dan nodig wees.

Die Verhuringstribunaal is die aangewese tussenganger wat die Wet op Huurbehuising  gebruik om dispute tussen verhuurder en huurder spoedig op te los. Die tribunaal moet beide partye se belange balanseer en moet ook beide kante teen onbillike praktyke en uitbuiting beskerm.

Hou in gedagte dat hierdie wet en tribunaal slegs van toepassing is op residensiële eiendom soos ‘n woonhuis of woonstel. Dit is nie op huurkontrakte vir kommersiële en nywerheidspersele van toepassing nie.

Wat beloop die kostes en hoe werk dit?

Hierdie dienste is gratis en verniet. Die proses begin wanneer een van die partye die geskil na die plaaslike Tribunaal verwys. ‘n Onpartydige mediator sal dan aangestel word om die partye te help om die aangeleentheid aan te spreek en tot ‘n skikkingsooreenkoms te kom. Indien die partye nie tot ‘n vergelyk kan kom nie word die dispuut formeel aangehoor. Aan die einde van die verrigtinge word ‘n bevinding gemaak. Die bevinding is bindend en moet nagekom word en kan strafregtelik afgedwing word. Enige van die partye kan die bevinding op hersiening na die Hooggeregshof neem.

Jy kan self die klagte opstel en self die saak by die Tribunaal voer. Dit is egter veiliger om jou regsverteenwoordiger opdrag te gee om dit te hanteer, veral as daar baie op die spel is.

Die Tribunaal is nie by magte om ‘n uitsetting te gelas nie; slegs ‘n hof kan so ‘n bevel uitreik. Daarom sal ‘n verhuurder dikwels eerder dadelik wil begin met ‘n formele hofsaak.

Vir die meeste dispute behoort huurders en verhuurders ernstig te kyk na die vinnige, maklike en goedkoper opsie van ‘n verwysing na die Tribunaal.

Voorkoming is beter as genesing…

Dit is natuurlik die beste om enige dispuut in geheel te vermy. Begin met ‘n huurooreenkoms wat volledig en duidelik opgestel is. Maak seker dat jy aan die basiese voorskrifte voldoen soos gesamentlike inspeksies vir enige skade aan die perseel, belegging en terugbetaling van die huurdeposito en vermyding van enige onbillike huurpraktyke.

Verkry bystand van jou prokureur. Om bloot ‘n standaard huurooreenkoms te gebruik sonder om toegepaste advies te verkry is nie aan te beveel nie.

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20 Sacks Circle.1BELLVILLE

Together Riaan & Johan concluded a 5 Year lease with GoReefers

 

 

11 AdderleyCAPE TOWN

In a joint effort Joshua & Mia secured a long term lease with Intelligent Debt Management (PTY) Ltd, which landed us an incentive trip with Growthpoint Properties

 

 

11 KinghallEPPING INDUSTRIA I

Johan successfully placed RCL Foods in Epping Industria with a 5 year lease contract in place

 

 

Erf 22937, ParowPAROW

Through Gerhard’s negotiations, Equites Propety Fund is the new owners of land measuring ±29, 800m² in Parow Industria

 

 

Saxenburg ParkSAXENBURG PARK I & II

Gerhard sold 2 pockets of land measuring ±2, 400m² each in Saxenburg Park I & II

 

 

rbt

WELGEMOED CENTRE

On the Retail & Commercial side of the business, Riaan successfully placed Vida E in Welgemoed Centre

 

 

Erf 1196BLACKHEATH INDUSTRIA

Joshua sold a 2ha industrial site to be developed for mini factories

 

 

Erf 15711WELLINGTON

Johan successfully sold 10.50ha of industrial land to a National company, who intends to set up a manufacturing plant

 

 

29 ElectronBLACKHEATH INDUSTRIA

Johan signed a 3 year lease with Dumachem in a ±1, 000m² unit

 

 

Kiaat RoadKRAAIFONTEIN INDUSTRIA

Joshua secured a lease for Motorworld Logistics (PTY) Ltd for their Workshop & Truck yard in Kraaifontein

By Heather Marsden

As a landlord, are you keeping track of your tenant’s municipal accounts? Do you know if they are in arrears? Do you know how many municipal accounts your tenant may have open with the municipality? You could be in for a surprise when the municipality looks to you to settle these outstanding accounts.

On 29 May, the Supreme Court of Appeal (SCA) confirmed certain municipal powers when it comes to collecting outstanding municipal debts. In the case of Pearson (Pty) Ltd v eThekwini Municipality (SCA) (unreported case no 241/2016, 29-5-2017) the court confirmed the power of a municipality to transfer credits between two different municipal accounts.

The case dealt with two sections of the Local Government Municipal Systems Act 32 of 2000 (the Act), namely –

  • s 102(1)(b) – ‘A municipality may –

(b) credit a payment by such a person against any account of that person’; and

  • s 118(3) – ‘An amount due for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is owing and enjoys preference over any mortgage bond registered against the property’.

The facts of the case

A tenant occupied two different properties owned by different property owners. The tenant opened a municipal account for each property for the supply of utilities and municipal services to the respective properties. The tenant was subsequently placed in voluntary liquidation with outstanding amounts owing to the municipality in respect of each municipal account.

At one point, prior to liquidation, the tenant made payments to the municipal account associated with the appellant’s property (the first property). The municipality, acting in terms of s 102(1)(b) of the Act, elected to credit the payments made in respect of the first property to that of the tenant’s other municipal account held in respect of another property (the second property). As a result, the amount owed by the tenant for its account in respect of the second property was regarded as paid in full, while the amount owing for the account for the first property (owned by the appellant) did not record the payment which had been made by the tenant, leaving the appellant liable for a municipal account of approximately R 3,1 million. The municipality subsequently terminated the services supplied to the appellant’s property due to non-payment. In the end, the appellant paid an amount to the municipality, under protest, in order to restore the service supply to its property. Included in this payment was the sum of approximately R 1,4 million, which the appellant claimed it should not be held liable for as this amount was unlawfully credited by the municipality to the municipal account of the second property instead of the appellant’s property.

While the appellant acknowledged the municipality’s right in terms of s 102(1)(b) of the Act, it argued that the exercise of this right by the municipality meant that the municipality should not then be entitled to invoke s 118(3) of the Act to hold the appellant liable to discharge the tenant’s debt, which was related to another property not owned by the appellant.

The inquiry before the SCA was whether the conduct of the municipality in holding the appellant responsible for the full outstanding balance on the municipal account related to its property was rendered unlawful by the municipality’s prior exercise of its right in terms of s 102(1)(b) of the Act to transfer credits between accounts, which had the effect of increasing the amount owing on the account related to the appellant’s property.

The court noted that s 229 of the Constitution vests a local authority with the power to impose ‘rates on property and surcharges on fees for services provided by or on behalf of the municipality’, which power is further regulated by national legislation in the form of the Act. The Act refers to the responsibility of municipalities to collect its debts and to adopt a credit control and debt collection policy for this purpose. The court turned to the municipality’s credit control and debt collection policy and found the following:

‘7.1 In terms of Section 118(3) of the Act an amount due for municipal service fees, surcharge on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is owing and enjoys preference over any mortgage bond registered against the property.

7.1.1 Accordingly, all such Municipal debts shall be payable by the owner of such property without prejudice to any claim which the Municipality may have against any other person.

7.1.2 The Municipality reserves the right to cancel a contract with the customer in default and register the owner only for services on the property.

. . .

7.3 Except for property rates, owners shall be held jointly and severally liable, the one paying the other to be absolved, with their tenants who are registered as customers, for debts on their property.

. . .

10.1 For consolidated accounts the Municipality may in accordance with section 102 of the Act credit any payment by a customer against any account of that customer.

. . .

10.4 The Municipality’s allocation of payment is not negotiable and the customer may not choose which services to pay.’

The court held that the municipality had acted in accordance with s 102(1)(b) of the Act, which it was entitled to do. In addition, its conduct matched that which is set out in its credit control and collection policy adopted in terms of the Act.

The appellant had only been asked to make payment for municipal services supplied to its property. The fact that the amount owed on its property account would have been reduced had the municipality not exercised its power to transfer payments from one account to another in terms of s 102(1)(b), did not have any bearing on the municipality’s right to collect the full amount owing in relation to the appellant’s property.

While the municipality’s actions may have had an unfair result on the appellant, the court found that they were not unlawful. The court noted that the municipality’s actions were tempered by the fact that the municipality had only transferred payments made by the tenant to the second property account and in that way had not used any of the appellant’s funds. In addition, the appellant was only being asked to settle the account for municipal services provided to its property and not that of the second property.

This case confirms a municipality’s power –

  • to transfer credits between accounts held by a single account holder but in respect of two different properties with two different owners; and
  • to claim from the owner of a property, any unpaid amounts due by the account holder based on the municipality’s right to hold the property as security for charges levied.

Since a property is regarded as security for any unpaid municipal charges, transferring credits between municipal accounts has the effect of increasing the contingent liability of one property owner, while the contingent liability of the other property owner is decreased. Property owners are cautioned to monitor their tenant’s municipal accounts in order to manage any contingent liability in relation to their property.

Heather Marsden BSocSci LLB (UKZN) is an attorney at Eversheds Sutherland in Durban.

This article was first published in De Rebus in 2017 (Nov) DR 18.