Tshwane Council may not levy 'illegal use' rates on properties
In a judgment that could be of importance to Pretoria property owners whose rates and taxes have significantly escalated over the years, the Pretoria High Court has ruled that the Tshwane Metro Council is not allowed to include a category of "illegal use" in its rating policy.
When the council adopted its municipal property rates policy in terms of the Municipality Property Rates Act, it created a category known as "illegal use".
This was used to levy rates and taxes on an exorbitant scale on properties it believed to be in contravention of the property's zoning.
Law firm Marius Blom & GC Germishuizen Inc approached the court to have this policy declared unlawful.
Lawyer Marius Blom said he had suddenly noticed an additional amount of more than R100 000 on the rates and taxes bill of the property in Duncan Street, Brooklyn, from where they run their firm.
"This illegal category (was used to rate) the property. It was also retrospective from the date of the inception of the rates policy."
Blom refused to pay and told the council that this higher category or rating was illegal and not provided for in the Municipal Property Rates Act. The council simply ignored him and he turned to the High Court.
The question before the court was whether "illegal use" is a valid category for the determination of municipal rates. The court was told that the rates levied by the council against Blom had always been in accordance with the rates applicable to residential properties.
However, during March 2010 Blom noticed that the rates had increased by a "gigantic amount".
The court was handed an invoice stating he owed R170 951 at the time. He was being rated under the "illegal use" category.
Acting Judge Jan Hiemstra noted that Blom did not use the property for residential purposes, for which it was zoned, but for business purposes as he ran the law firm from there. Hoever, the judge said the question was whether the council could introduce an "illegal use" category.
The judge said the council did have the power to create additional categories in its rates policy. However, all the listed categories were for lawful use of the properties.
"To include a category 'illegal use' in the list is to make illegal use lawful. Also, to levy a higher than normal rate on a property because it is used for non-permitted purposes is to impose a penalty without due process," the judge said.
He agreed with Blom that it was not permissible for the council to include a category of "illegal use" or "non-permitted use" for the rating of properties in its rating policy.
However, the judge did not let Blom entirely off the hook and said since he did not use the property for residential purposes, but as a business, it should in his view be rated according to the rates applicable to business properties in Brooklyn.
Blom told the Pretoria News that this judgment could be of interest to others rated on the same illegal basis. "They can take the necessary steps to protect their rights."