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ANC, DA fight landmark debt ruling

In an attempt to stop the Constitutional Court from confirming a court order which compels municipalities to ensure new homeowners are not saddled with responsibility for historical property debt, the DA and ANC have formed an unlikely alliance.

Lawyers for the ANC-run Ekurhuleni municipality and DA-led City of Tshwane have lodged papers at the Constitutional Court to convince the court to overturn an earlier Pretoria High Court ruling.

That high court declared a section of the Local Government Municipal Systems Act constitutionally invalid.

The section allowed municipalities to hold property owners and tenants responsible for previous owners’ municipal debts.

Refusal to pay the inherited debtled to municipalities either refusing to connect new homeowners and businesses, or to cut off their services.

The SA Local Government Association, at the time, warned that Judge Dawie Fourie’s ruling could result in ruin for some municipalities, which are already grappling with debts running over R100-billion.

Thekiso Maodi, representing Tshwane, said the act allowed municipalities to finance their affairs by charging fees for services and imposing surcharges on fees, rates on property and other taxes, levies and duties.

“Without those, a municipality cannot fulfil its constitutional mandate. It’s important that a municipality be allowed to collect municipal debts,” Maodi said.

He said debts were tied up with properties and their worth, and not with a consumer and their unpredictable ability to pay.

Maodi said new owners often bought property while aware of the debt. “It cannot be argued that the act is procedurally unfair.”

He said in terms of the Pretoria High Court ruling the applicants who took the matter to court had been provided with statements by the Tshwane municipality, “reflecting all historical debts, including debts older than two years which would have informed their purchases”.

He said no rights were infringed and the homeowners who went to court could have resolved the dispute with the municipality before going to court.

Ekurhululeni’s lawyer, Natasha Chiba, said new owners purchased the homes with full knowledge of the debt, “and in some instances even undertake to pay the debts”.

No date has been set for the case to be heard.