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IOLProperty - South African Property For Sale
Friday Aug 10, 2012

Skewed property valuation raises eyebrows in Umhlanga

A commercial property in Umhlanga owned by Durban tycoon Vivian Reddy, a close associate of President Jacob Zuma, was undervalued by R110 million in the 2012 general valuation roll, an error the eThekwini municipality says it has now corrected.

This has raised questions about the roll's validity, with opposition parties saying it was so error-laden that the entire valuation process should be redone.

Reddy's property, which has partial sea views, was valued at R118.7m on the city's 2008 valuation roll. The same property dropped to R60m in the 2012 valuation roll.

After objections to the council about this oversight, the value of Reddy's property was reversed to R170m.

The 70 843m² property is owned by Gotya Props (Pty) Ltd and a Companies and Intellectual Property Commission search lists Reddy and Edward Robert Alexander as the company's directors.

Asked to explain Reddy's property had decreased by about R58m, eThekwini head of real estate, Keith Matthias said: "The municipality has, in its review of the General Valuation 2012, identified this error and corrected it. The value recorded against the property is R170m. This was processed on 28 July 2012."

eValuations, owned by Durban businessman Willy Govender, won the R27.7m contract to compile the 2012 valuation roll for non-residential property in eThekwini.

Govender's eValuations was previously awarded the contract to draw up the controversial 2008 valuation roll.

When the initial roll was released more than 50 000 objections were lodged and it was widely condemned for allocating incorrect values and having glaring omissions.

Minority Front councillor Patrick Pillay said Reddy's property raised questions about the fairness and accuracy of the latest valuation process.

"This is evidence that the valuation process can be manipulated to suit the interests of certain individuals," he said.

Pillay said properties of "ordinary people" were overvalued by thousands of rand and they had to pay inflated rates. "But it appears that the privileged are fortunate in the valuation process and that cannot be allowed to happen," he added.

DA caucus leader Tex Collins said eValuations had, since the beginning, produced valuation rolls that were totally skewed and should be held accountable for the mistake.

Collins said the matter raised the question of what influence had been brought to bear on eThekwini and eValuations. "We find this most suspicious and we will definitely ask for an investigation," he said.

Matthias said objections to the general valuation formally closed on March 31; however, the municipality did accept late objections beyond this date where reasons were provided.

The municipality has also provided a query process, "which would now be the mechanism by which a roll record could be reviewed".

"A total of 10 734 objections have been received to the general valuation of which 3 399 are to commercial or industrial properties... Compared to the approximate 55 000 objections to the 2008 general valuation this reflects considerable improvement to the roll in the four-year period," he said.

Matthias said the municipality and eValuations were both committed to processing all objections diligently to ensure they were accurate.

The Mercury was unable to reach Reddy for comment.

The Mercury

 
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