ANOTHER MUNICIPAL BLUNDER?
The Johannesburg Metro has advertised for objections against their 9th supplementary valuation roll.
Approximately 83,000 properties appear on this valuation roll.The main purpose of the roll is an attempt by the Johannesburg Municipality to correct mistakes that appeared on their general valuation roll that was implemented on the 1st July 2008.In essence the municipality is targeting properties that were either incorrectly categorized or substantially incorrectly valued in terms of sect 78 (1) (e) & (f)Whilst Johannesburg is perfectly entitled to bring about these changes and rectifications to their roll, the question that has to be asked is. "Why has it taken them so long to react?"These are errors and mistakes that should have been entered on their first supplementary valuation roll and not their 9th roll four years later!In terms of section 78(4) (e) of the MPRA, a category change has to be backdated to the date of the change.Due to the fact that an incorrect category was originally entered in the roll by the Municipal Valuer with no subsequent change in the use of the property thereafter, the amended category entry in the supplementary valuation roll will be backdated to the 1st July 2008.This means that certain property owners, who up to now have been paying very low rates because of the incorrect category, will now be paying substantially higher rates.These unfortunate property owners will be subject to a four year backdating of rates.Surely the Johannesburg Municipality had a moral obligation to correct these mistakes years ago and not burden property ratepayers with a substantial rates bill and rates hike, due to their own mistake and inefficiency.How will the Johannesburg Metro recover rates from owners who have subsequently sold and transferred their properties?The new owner cannot be held liable for the full backdated increase and it may not be possible to trace the previous owner.It is certainly not fair that certain owners pay backdated rates whilst others get away with no payment at all.Rates Watch is of the considered opinion that the Johannesburg Metro will levy the full backdated rates on the current registered owners and place the onus of recovery on these unfortunate persons.Where a property has been substantially incorrectly valued, which in the current Johannesburg scenario relates to undervalued properties, the date of implementation will be 1st July 2012.In all fairness, it is our view that due to the extension of the objection period this date should become the 1st August 2012.Valuation corrections or errors cannot be backdated.From an analysis of the screenings undertaken by Rates Watch of the 9th Johannesburg Supp roll, 80% of the properties screened were now found to be overvalued by the Joburg Municipal Valuer!The Joburg Metro is certainly going from one extreme to another. One blunder to the next!It is important for affected property owners to be aware that the Date of Valuation for all valuations appearing in the 9th supplementary valuation roll is the 1st July 2007.The selling price after the 1st July 2007 must be ignored. Unless an objection is lodged against any incorrect particular relating to an entry on the supplementary valuation roll, any other form of protest will not rectify the situation.The date for objections has been extended to the 25th July 2012.Property owners are invited to contact Rates Watch, "the country's leading valuation & rates watchdog" for assistance.
CAPE TOWN GENERAL VALUATION ROLL
The City of Cape Town has officially approved the compilation of their next general valuation roll.This valuation roll will be implemented on the 1st of July 2013.All properties will be revalued as at the 1st of July 2012.It is essential that Cape Town property owners retain all relevant information required for the determination of the municipal valuation as at this date.Rates Watch congratulates the City of Cape Town in their endeavors to shorten the valuation period and in so doing keeping pace with market trends and conditions.The ultimate objective for any municipality is the compilation of annual valuation rolls.South Africa's first annual valuation rolls were compiled for the City of Boksburg and thereafter for the City of Benoni by erstwhile Municipal Valuer Clive Massel, CEO of Rates Watch.Currently, Ekurhuleni Metro has retrogressed to a four year valuation cycle.Certainly in the case of all Metro Municipalities, the target should be a new general valuation roll every two years.This would be in keeping with international standards.
RATE PAYER TAKES EKURHULENI METRO TO COURT
An irate rate payer has issued a summons against Ekurhuleni Metro for overcharging rates and taxes due to a blatant categorisation error made by their Municipal Valuer ab initio.The property of the rate payer was incorrectly categorised as "Industrial" and not "Business and Commercial" A lesser tariff applies to the category "Business and Commercial".Rates Watch lodged a section 78 query requesting that the category error be rectified by the Municipal Valuer.The Municipal Valuer issued a "No Change" decision, which he later entered in a supplementary valuation roll.This automatically allowed Rates Watch the right to lodge an objection, which was again dismissed by the Municipal Valuer.An appeal against this decision was then lodged and the Valuation Appeal Board upheld the Rates Watch appeal.Section 78(4) (e) of the Rates Act states:-
"that the effective date for a category change is the date of change".The Municipal Valuer of Ekurhuleni elected to use the date of the supplementary valuation roll as his effective date of implementation.Because the Municipal Valuer of Ekurhuleni entered the incorrect category details against the property ab initio and because there was no change in the use, the only date that can be applicable is the 1st of July 2009, being the effective date of the Ekurhuleni General Valuation Roll.The Rate Payer is suing the municipality for a refund of incorrect rates levied on a wrong category entered by their Municipal Valuer.Tuckers Inc, the highly respected firm of property lawyers is acting on behalf of the applicant. A default judgment was obtained by Tuckers and Ekurhuleni have now applied for rescission. We will report on the progress of this case from time to time.This matter is being supported by Rates Watch in the interest of public justice and administration.
JOHANNESBURG APPEAL AGAINST THE DECISION OF JUDGE J. TSOKA REGARDING THE CATEGORIZATION & APPORTIONMENT OF VALUES FOR PROPERTIES USED FOR MULTI PURPOSES
Judge J. Tsoka dismissed with costs the application by the Johannesburg Metro to set aside the decision of the Johannesburg Valuation Appeal Board relating to an appeal submitted by Rates Watch regarding the correct apportionment of properties used for multi - purposes.Johannesburg Municipality has now applied for leave to appeal to the Supreme Court of Appeal against the decision of Judge Tsoka.The honorable judge in his judgement alluded to the fact that this matter was not a constitutional issue and that the remedy for the Johannesburg Metro is to correct their rates policy.In their application for leave to appeal the Johannesburg Metro stated:-
"By virtue of the great importance of the decision for the applicant and other municipalities the appeal should be heard".Ironically, Johannesburg Metro is one of the only metros in the country who do not correctly implement the apportionment of value based on multi-purpose usage.Multi-purpose properties are found mainly in areas such as Hillbrow, Berea, Joubert Park, Braamfontein and the Inner City.However, any property that is being used for more than one purpose qualifies in terms of the Valuation Appeal Board decision for multi-purpose apportionment & rating.If any property owner requires guidance or assistance regarding multi-purpose properties they are invited to contact Rates Watch.
You could well save yourselves many thousands of rands in reduced property taxes.This type of correction is retrospective.
THE IMPORTANCE OF 1ST JULY 2012
We again remind ratepayers of the importance of this critical date.On the 1st of July 2012 all properties falling within the municipalities of Cape Town, Ekurhuleni, Johannesburg, Nelson Mandela, and Tshwane will be re - valued for rating purposes.The new valuation rolls will be implemented on the 1st of July 2013.
Rates Watch anticipates that objections will be called for during mid January to mid March 2013.We again emphasize the need for all property owners to keep comprehensive records and information relating to their property as at the 1st of July 2012Rates Watch offers a pre-screening facility, whereby they will estimate based on all the facts and figures at their disposal, what they consider the Municipal Value should be as at the 1st July 2012.This will then be checked against the Municipal Valuation as and when the roll is advertised for objection. A recommendation will then be made on the merits of lodging an objection.
RATES WATCH LAUNCHES A HIGH COURT DECLARATOR APPLICATION AGAINST THE MUNICIPAL VALUER OF EKURHULENI
Rates Watch has recently brought about a High Court Declarator order against the Municipal Valuer of Ekurhuleni compelling him to:-
- Handle all omission objections based from a valuation query, where such queries have been submitted by an applicant, but not included in a supplementary valuation roll.
- Backdate category changes to the date of the general valuation where the Municipal Valuer has entered an incorrect category in his general valuation roll ab initio.
The main thrust of the Rates Watch application is that it is constitutionally unfair for any Municipal Valuer to dismiss a section 78 application or query without allowing the applicant the right of having such decision reviewed by the Valuation Appeal Board.It is our submission that, this refusal is in conflict with the provisions of PAJA and that any person who is affected by a decision relating to an administrative action is entitled to fair and administrative justice.It is further argued that it is constitutionally unfair for a Municipal Valuer to act unilaterally and subjectively and not be subjected to the provisions of section 50-55 of the Rates Act allowing for an objection and appeal process to be followed.Even the esteemed SARS cannot escape the provisions of fair and just administrative action.The Northern Gauteng High Court recently handed down a judgment which involved the revocation of a tax clearance certificate by SARS.Judge Wright ruled that the applicant was entitled to reasonable notice of SARS'S intention to call the clearance certificate into question as well as an opportunity to put its case to SARS."This accords with the fundamental tenet of administrative justice that before a party is prejudiced or penalized, it has the right to state its case".SARS are therefore obliged to follow proper administrative procedure in their dealings with tax payers.This judgement has many similarities to the declarator sought by Rates Watch.A unilateral decision by a Municipal Valuer, who is deemed to be part of an administrative process that disallows a rate payer any further right of appeal, is a blatant breach of fair and just administration.PAJA also requires that a Municipal Valuer cannot act capriciously or arbitrarily.
Johannesburg Municipality in their 9th supplementary valuation roll has made category changes to a large number of properties.These errors were made ab initio in their general valuation roll effective on the 1st of July 2008.Johannesburg Municipality is backdating the category change to the 1st July 2008 in terms of the Rates Act.This decision by the Johannesburg Metro fully supports the basis of the Rates Watch declarator application.Rates Watch sympathizes with all rate payers who are going to be affected by this category rectification.We understand fully, the financial hardships that this will bring about.Johannesburg Municipality has to be questioned as to why it has taken them four years to wake up to this problem.Surely this should have been rectified on their first supplementary roll?It would certainly have eased the financial burden of the unfortunate rate payers who now have to face a retrospective adjustment to the 1st July 2008.This application is being brought about by Rates Watch in the interest of all property owners who are affected by unjust and unfair administrative action.
BEN ESPACH AT THE SOUTH AFRICAN INSTITUTE OF VALUERS NATIONAL SEMINAR
Director of valuations of Rates Watch, Ben Espach recently delivered a paper on aspects of section 78 of the Rates Act as well as the implications of certain provisions of PAJA and the Constitution regarding fair administrative justice at the national seminar of the SAIV recently held at East London.The topic of the presentation was:-"Municipal Property Rates Act, 2004
You did not object - It is not the end of the world".Section 78 of the Rates Act and its correct interpretation is a complicated and complex issue, with few Municipal Valuers and municipalities fully understanding the meaning of this section.What are probably more important are the sections of PAJA which relate to fair administrative justice.It is clear from the expert presentation of Ben Espach that, municipal valuers cannot work just within the provisions of the Rates Act and they are obliged to follow fair and just administration in terms of both the Constitution and PAJA.Ben's views and those of Rates Watch will shortly be put to the test in their High Court Declarator application against the Municipal Valuer of Ekurhuleni.
Reductions in Valuations now
3 Billion Rand!
Till Next Month
From Your Rates Watch Team "The country's leading professional Municipal Valuation and Rating Watchdog"