Section 118 of the Act Municipal Systems Act 2000

Part 118 is a really well-known part in Municipal Programs Act 2000 that stops switch of a property until municipal providers, charges, property taxes and charges or some other municipal taxes should not paid in full. Part 118 is named: Restrained of Switch of Property. Web page 51 of the Act Part 118.1) A registrar of deeds or different registration officer of immovable property might not register the switch of property besides on manufacturing to that registration officer of as prescribed certificates: a) issued by the municipality by which that property is located; and b) which certifies that each one quantities due in reference to that property for municipal service charges, surcharges on charges, property charges and different municipal taxes, levies and duties throughout the two years previous the date of utility for the certificates have been absolutely paid.Which means that if a landlord of any kind of property has tenants and the tenants don’t pay their share or what’s due by them to municipal accounts, which incorporates providers similar to water and electrical energy, the municipality won’t switch a property. The constitutionality of this part was in query for a few years attributable to the truth that tenants typically created money owed and arrears leaving the owner with out the potential of transferring the property. The issue turned even worse when the tenants had been nowhere to be discovered and the owner, desirous to switch the property, needed to pay all of the money owed to have an effect on switch.The constitutionality of this Part 118 was in query just because the owner didn’t create these money owed in precise truth, nor did the owner use the providers offered; so why ought to the owner pay for them?Nevertheless, the municipality has just one interface so far as duty for funds on the land is worried; and that’s the landlord. The Courtroom judgement answered some long-awaited questions regarding this drawback. On this case the query was: is the owner accountable for the money owed created by the tenant? The Constitutional Courtroom mainly needed to resolve whether or not these costs additionally associated to money owed of non-owner occupiers similar to tenants, when in actual fact the tenants signed providers agreements, by opening accounts similar to for electrical energy, straight with the patron. The Constitutional Courtroom held that sec.118 stood the constitutional check, as a result of, although part 118 permits for deprivation it isn’t arbitrary.In easy phrases, the owner can go and get copies of the tenant accounts from the municipality at any time limit. The municipality is obligated to offer a landlord such copies and therefore the owner in actual fact might have completed one thing to keep away from the tenant stepping into arrears or arrears getting out of hand. Which means that the owner is accountable to what’s taking place and who he permits to dwell on the land/property. To complicate the issue additional, some municipalities will discontinue the providers on accounts that get into arrears whereas different municipalities don’t, or will take too lengthy to take motion.This leaves the owner with an issue. If the municipality would simply swap off the utilities that aren’t paid no less than the tenant will not create extra arrears. Nevertheless, this isn’t completed by all municipalities persistently and for that reason the owner could also be left with huge arrears. At time of switch then the owner should pay up all arrears if switch is to happen as to Part 118. Although this part of the Act isn’t new and has been creating issues for landlords, it’s now been determined with this judgement that this part stands the check of the structure. Which means that landlords have to start out taking severe steps to not be left with any money owed from tenants.The after impact ensuing from this judgement was additional far reaching at ranges of municipalities. It has been reported that some municipalities have fully stopped opening accounts within the names of tenants. The boards and indicators began exhibiting up at municipalities that tenant accounts are not being opened in any respect. This can be a good thought. Not solely attributable to arrears, but additionally attributable to double accounts on some properties and basic accounting mess. Nevertheless, for a landlord which means that they’re squarely accountable of the accounts.Moreover, and for the higher, no less than now landlords know if arrears are being created at any time limit and begin taking some motion earlier than issues get uncontrolled. When it comes to electrical energy provide, it has been reported that some municipalities not trouble with disconnecting provide. After certain quantity of arrears, they simply take away the metering gear all collectively. Some landlords reported arrears in extra of R20,000 and now including to that, they should pay R4,500 for the municipality to re-install the metering gear.The owner all the time has the choice to pursue the tenant for cost, which can or will not be achieved, however within the mean-time, the owner can not place a brand new tenant within the premises, until they pay all due and return the meter, in any other case a brand new tenant can not dwell within the premises with out electrical energy – which suggests losses in future rental revenue.