30 year old municipality debt

A judgement was ruled in the Supreme Court of Appeal that property owners would be liable for outstanding Municipal Debt as old as 30 years.


What made this ruling alarming was that the debt constitutes a lien against the property and as such the property owner would be liable, even if the debt was incurred by a previous owner or tenant.


In September 2014, the Pretoria High Court ruled against the Municipality for payment of the historical municipal debt older than 2 years, seemingly contradicting the Supreme Court ruling, but for a distinguishing factor, the property was sold in execution.


Now for the latest Supreme Court of Appeal judgement from January 2016, which confirms the Pretoria High Court ruling of 2014, where a property is sold in execution this extinguishes the historical debt.


In summary the Municipality can block a sale by refusing to issue a clearance certificate until the preceding 2 years municipal debt has been settled. And due to statutory “hypothec” over the property, historic municipal debt will also be recoverable for 30 years, except in the specific circumstance when a property is sold in execution.