THE Constitutional Court is set to hear a ground-breaking case regarding the interpretation of a section of the Municipal Systems Act and the controversy over whether or not property owners should be liable for previous owners’ municipal debt.
The case involves litigation between municipal debt specialist, New Ventures Consulting and Services (NVC) and the city of Tshwane Metropolitan Municipality, Ekurhuleni Metropolitan Municipality and the Minister of Co-Operative Governance and Traditional Affairs.
The municipalities involved had interpreted this section in a manner that had allowed them to “visit the sins of a predecessor in title upon innocent third parties,” according to NVC managing director Peter Livanos.
“In effect, they attempted to hold the new owner of a property liable for the previous owner’s municipal debt,” he said.
In November last year, after these matters were heard in the North Gauteng High Court, the court held that the conduct of the two municipalities was unlawful and declared that it was constitutionally invalid for the municipalities to hold the new owner of a property liable for the previous owner’s municipal debts on that property.
It was also unconstitutional for the municipalities to refuse to supply services or to suspend municipal services or to refuse to enter into consumer agreements with the new owner.
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