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IOLProperty - South African Property For Sale
Wednesday Apr 25, 2012

eThekwini property owners fight over rates debt

Flat owners in Durban have put on their boxing gloves and are fighting off a flood of court applications - apparently brought by the eThekwini municipality - to have their buildings placed under administration, in some cases for debts of as little as R3 000.

With the assistance of Durban's Legal Resources Centre (LRC), activist Desmond D'SA and the Poor Flat Dwellers Association made an application in the Durban High Court to become amicus curiae (friends of the court) in 142 pending applications against bodies corporate.

They want to run one case testing the legality of the applications, which, they allege, are being brought by a third party which bought old body corporate rates debt from the municipality in 2008.

While the applications are said to be brought in the best interests of the owners and aimed at getting so-called "bad buildings" back on sound financial footing, the LRC'S Mahendra Chetty said it seemed the Sectional Title Act was being abused and used to recover debt, some of which might have already prescribed.

While the applications are mainly brought against "poor buildings", the Mercury is aware of at least one instance in which a well-run building, with a couple of hundred thousand rand in the kitty, was threatened with administration because of an alleged debt which the body corporate is disputing with the city.

Concerns were recently raised by Judge Johan Ploos van Amstel when, in matters before him, he noted that one involved an alleged debt of R11 000 and another only R4 000 - less than the legal costs of the application.

All the applications were launched by the same firm of attorneys with the recommendation that the same administrator be appointed in most cases.

According to Chetty's affidavit, which came before Judge Yvonne Mbatha yesterday, in one of the cases the body corporate had previously been placed under the control of an administrator, a fact not disclosed in the application. Chetty said he read some of the pending applications, and had several concerns, including the fact that letters were being sent to wrong addresses.

He said no evidence was introduced that the body corporate was not functioning or was "deficient in its management" and would benefit from the imposition of an administrator. In one instance, he said, the debt claimed was R3 262 "disproportionate to the costs of administration".

Chetty also questioned the constitutional legality of the alleged sale or cessation of the debt, saying it put property and housing rights in the hands of a third party, not bound by the same obligations on government, particularly to the poor.

In his affidavit, D'SA said poor people, unable to meet the administrator's demands for levies, were being turfed out of their homes, and property developers were snapping up their units.

He said in Flamingo Court, the former council flats in Umbilo, a property developer now owned at least 20 units.

"Many occupants of municipal flats have been residing in these homes for more than 20 years. They bought them just after the 1994 elections," he said. "They have little means and no access to legal advice."

The attorney involved with the applications, Jos van Heerden, said he was taking instructions from the municipality. "We may well agree to the amicus curiae application and then argue the matter on its merits," Van Heerden said.

City Treasurer Krish Kumar, did not respond to questions.

The Mercury

 
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