Mr. Jason Ngobeni: City Manager

PO Box 3242

Pretoria

0001

Fax No. (012) 358 1112

086 210 1052

09 May 2013

Dear Mr. Ngobeni

RATES LEVIED ON VACANT PROPERTIES BY CITY OF TSHWANE:INVOLVEMENT OF THE WE CAN WIN INITIATIVE

DISPUTES WERE DECLARED WITH THE CITY OF TSHWANE IN TERMS OF THE CITY OF TSHWANE’S CREDIT CONTROL AND DEBT COLLECTION POLICY READ WITH SECTION 102 OF THE LOCAL GOVERNMENT: MUNICIPAL SYSTEMS ACT AND THE LOCAL GOVERNMENT: MUNICIPAL PROPERTIES RATES ACT.

  1. Kindly take note that Malvigenix NPC, trading as The Wecanwin Initiative, instructed Len Dekker Attorneys to represent it in this matter and to provide you with the following information, and to request certain information and actions or restrains from the City of Tshwane.
  2. Kindly also take note that our client Malvigenix NPC, trading as The Wecanwin Initiative, a collective action group of several vacant land owners (attached is a list of members and their properties) and is mandated to act on behalf of its members with respect to the disputes declared with the City of Tshwane, which City of Tshwane failed to properly address in terms of the relevant legislation.
  3. Kindly also take note that it is our clients instruction to place the following on record:
  1. The City of Tshwane implemented a vacant land category from July 2012. This category has been added to the Draft 2013/14 MTREFin spite of the fact that no such category is provided for in Section 8 of the Municipal Property Rates Act, 6 of 2004.
  2. Consequently the rates on vacant land in a predominantly rural area increased between a 639% and a 1376% with respect to the various properties, with no considerationor discussion of the impact thereof on or with the community, nor did it take the economic impact thereof on the community as a whole or the value of the affected properties, as required in terms of the Constitution of SA. It needs to be emphasized that at no stage before the implementation of the Vacant land category with respect to the properties, in the previous area of Jurisdiction of the Kungwini Local Municipality or the Nokeng Tsa Taemane Local Municipality, were the amendment of the relevant property’s category or the implication thereof discussed and/or brought to the attention of the last mentioned Municipal areas of jurisdiction.
  3. Notwithstanding the fact that a large number of properties, categorized as vacant land by the City of Tshwane, which category were not amended by way of a Supplementary Valuation Roll as determined in the Local Government Municipal Property Rates Act, and therefore the categories of the property remained Residential as indicated in the previously mentioned Local Municipalities’ General Valuation Rolls. The City of Tshwane not only, illegally changed the categories of the properties concerned at some date arbitrary date in time but also proceeded to backdated accounts of respective residential properties from some time in 2011and simply added the accumulated amounts on various accounts as “Financial Charges” with no explanation what so ever to the owners of the properties.
  4. It appears from the available documentation that in principle the City of Tshwane based their “vacant land” rates on the valuations of the“residential properties”, deemed to be “vacant land” properties on the values as contained 2008 Kungwini and Nokeng Tsa Taemane Local Municipalities’ Valuation Roll. These valuations are on average to high and not in relation with the market value at the time of valuation e.g. around June 2007. A indication that the last mentioned are correct is found in the contents of the “New General valuation Roll” published by City of Tshwane for 2012 to 2017 financial years of the Municipality, were the valuations in the majority of “vacant Properties” as depicted therein decreased by as much as 30% in certain instances.
  5. The tariff on which vacant land property are rated is 6.014 cents in the rand for the 2012/2013 financial year. The rate published in the Draft 2013/14 MTREF and Property Rates Policy and Property Rates By-law is proposed to be 0.0533 and has decreased. The problem is still that the higher rate on “vacant land” is a penalty rate, which has the impact that in rural areas the properties became valueless, and the sales of proprieties with this additional burden, became nearly impossible. The rates levied by the City of Tshwane equates to a medium size bank loan on a property, without a single construction or a building on a property. Furthermore it must be noted that, contrary to the residential properties within the City of Tshwane’s area of jurisdiction rated at 0.0135400 in the rand, “vacant Land “ owners do not qualify for the standard Valuation Rebate of R39, 49 nor the Residential Rebate of 35% granted by the City of Tshwane. There is therefore a double jeopardy for “vacant Land” owners, based on the fact that they are rated at an exorbitant rate versus the normal residential rate and that they additional thereto also do not qualify for any rebates grated by the City of Tshwane.
  6. It must further be emphasized that the city of Tshwane agreed to and promulgated punitive measure which the City of Tshwane published with respect to property with non permitted use/contravenes the zoning for the respective property at a rate of 0.06432, very similar to the 0.06014 cents in the rand for the 2012/2013 financial yearwith respect to vacant land. Therefore the City of Tshwane equates or deem the fact that a land is “vacant” in the same light as that of an illegal use of land, e.g. the use of a Residential property as a business. This can clearly not be a fair practice that will enhance equity in treatment of the property owners in its area of jurisdiction nor economic growth and stability within said area of jurisdiction...
  7. The consequence of the above mentioned were that our members had no option but to lodge a formal with respect to the above mentioned with the City of Tshwane, and approach The Wecanwin Initiative to take the matter up with the City of Tshwane on their behalf especially due to increased and backdated rates, and threats received from collecting agents on behalf of City of Tshwane.
  8. Based on the documentation received from our members it is clear that the City of Tshwane did not deal with the disputes declared by our members as stipulated in the relevant legislation, and the officials of the City of Tshwane decided to consider the disputes lodged as a collective and developed and drafted the standardized vague and non specific response to all the objections received from the property owners. As indicated the standard response received, and in some instances not addressing certain other crucial aspects of the disputes, received by our members form the City of Tshwane was to say the least unsatisfactory and uninformative, Therefore it is again brought under your intention that till date hereof no dispute by any of our members has been duly attended and resolved as is the intention of the Legislator in the relevant Acts.
  9. Kindly take note that disputes are still in the process of being declared on a continuous basis by new members, as and when they become aware of the problem or affiliate with our clients in joining the interaction and possible further legal steps against the City of Tshwane, to ensure that their legal rights are attended to and addressed by the City of Tshwane.
  10. In an attempt to resolve the above mentioned, a meeting was set up by Directors of The Wecanwin Initiative, a D.A. Counselor, Mr. Andre van der Walt and the revenue manager, Mr. Mr. Dayalan Pillay, the executive director: Revenue Management, Mr Sam Chepape, Director of Property Rates and the Department Head of the valuators of the City of Tshwane, in order to resolve the matter.
  1. During the meeting Mr Pillay was adamant that the City of Tshwane in the process of amending the “category of properties from residential to vacant Land” acted in accordance with the Municipal Rates Act, which submission based on the above mentioned is clearly not true, and notwithstanding the fact that the above mentioned disputes were not dealt with or duly attended to in terms of the relevant legislation,threatened that if vacant land owners do not settle outstanding accounts, the City of Tshwane, it will proceed in attach the properties in question. This will clearly, even should the City of Tshwane based on the above mentioned information succeed in its actions, especially based on the present state of the economy not be in the benefit of the Municipality, and in the end be counterproductive. The property owners of vacant land are already dropping their prices to get rid of the said properties, with very little or no purchaser based on the high vacant land rate levied by the City of Tshwane.
  1. Members of the Wecanwin Initiative have outstanding rate accounts with the City of Tshwane and notwithstanding the fact that a dispute has been duly lodged and not properly attended to by the City of Tshwane; they are being threatened and harassed by collection agencies acting on behalf of the City of Tshwane.

WAY FORWARD

  1. The following actions must now be taken by the City of Tshwane:
  2. Refrain from any credit control measures and action instituted or in the process of being instituted against members,reflected on the attached list of the members of the Wecanwin Initiative.
  3. Furnish Len Dekker Attorneys with copies of:
  4. All the comments and objections received in respect of all properties and categories thereof regarding the City of Tshwane’s Notice dated 8 June 2012 as published by Mr Jason Ngobeni, the City Manager.
  5. All The dispute register numbers with respect to the register to be kept by the City Manager, relating to all the disputes lodged with the City of Tshwane, as required in law.
  6. The official responses with respect to each and every dispute lodges, with the specific reasons/merits considered by the relevant official stating why the dispute so lodged were not successful.
  7. An Explain, in writing, how the City of Tshwane can implement a vacant land category and rate accordingly when such a category is not in the Municipal Rates Act of 2004 and not approved by Parliament in the Amendment to the said act.

From the above it is our clients and our submission, that propertiesof the members of the Wecanwin Initiative is wrongfully rated and penalized by the City of Tshwane, by the categorization as vacant land and backdated on a category not yet approved and accounts should reversed.

Your urgent response and compliance with our requests in this matter is awaited by return mail.

Yours sincerely

Gerhard J. Erasmus

LEN DEKKER ATTORNEYS

Copies to:

Mr Andile Dyakala : Chief Financial Officer: City of Tshwane Metropolitan Municipality (AndileD@ tshwane.gov.za)

Mr. Dayalan Pillay: Executive Director: Revenue Management()

Mr. T.I. Lehobye: Director: Properties Valuation ()

Mr. Alex Jonker: Deputy Director: Properties Valuation ()

Associates: L.D. Dekker LLB MSA LLM (Labour) - J.C. Van Der Walt LLB - G.J. Erasmus BCom (law) LLB

Professional Assistants: L.M. Dekker LL.B. - J J Jacobs B.Com LL.B.

In Association with Zelda Karelsen Attorneys {Conveyancer & Notary}