City of Joburg appeal: A case with far-reaching implications

For many years, Rates Watch has believed that some municipalities have been getting away with the backdating of valuations in cases where they did not complete their work in time. This belief was put to the test at a recent appeal hearing at the Valuation Appeal Board for the City of Johannesburg (CoJ).

The owner of the property in question completed a second building on the property and received a certificate of occupancy thereafter in May 2015. Normally, this date should also be the date from which a value may be changed by the City.

It was expected that the municipality would revalue the property to reflect the value added by the second building within a reasonable time. To cut a long story short, the supplementary valuation to amend the value was recorded on 19 June 2018, three years after the certificate of occupation was issued! The adjustments to reflect the rates based on the new value appeared on the October 2018 statement.

The owner did not receive the notice required by the MPRA in terms of section 78(5) to inform him of the supplementary valuation and could not understand why the property rates adjustments were made. An investigation by Rates Watch revealed that the supplementary valuation was made in June 2018 with an effective date corresponding with the date the certificate of occupation was issued, i.e. May 2015.

An objection was submitted when the 7th Supplementary Valution Roll was advertised in October 2018. The objection was dismissed by the municipal valuer and an appeal was submitted in September 2020.

CoJ instituted debt collection actions and the water supply to the building was restored after the owner obtained a judgement against CoJ on an urgent application. The Gauteng High Court ruled in August 2020 that, pending the appeal, CoJ “is…. interdicted from disconnecting, interrupting or otherwise interfering with the electricity and water supply …” of the property.

At the appeal hearing held on 6 December 2021 it was submitted that since the supplementary valuation was not done timeously, the City could not do the supplementary valuation in terms of section 78(1)(d), and it became an omission to the valuation roll and the supplementary valuation rolls. Therefore, it could only be done in terms of section 78(1)(a), being an omission from the 4th, 5th and 6th Supplementary
Valuation Rolls.

The Valuation Appeal Board agreed with the submission and the appeal was upheld.

The effect of the ruling is that:

  • The effective date corresponding with the date of the Certificate of Occupancy, which was 25 May 2015, is incorrect and CoJ was not entitled to adjust the levies retrospectively;
  • The effective date will be the 1st of the month following the posting of the 78(5) notice;
    • A section 78(5), dated 27 June 2018 was discovered before the appeal hearing which confirmed that the effective date must be 1 July 2018; and
  • Since a new valuation roll was implemented on 1 July 2018, no property rates could
    be levied on this supplementary valuation.
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