In City of Johannesburg Metropolitan Municipality v Zibi and another (234/2020) [2021] ZASCA 97 (9 July 2021), the Supreme Court of Appeal dealt with the question of whether a municipality was permitted to impose a penalty tariff in relation to the illegal use of property.

The respondents had purchased a house that had been zoned as ‘residential’ in terms of both the 2013 and 2018 general valuation rolls. Initially, the Municipality had imposed a monthly property rate of R898. This changed when it discovered that the respondents were leasing out bedrooms to students and young professionals, which meant that the respondents were using the property as a commune or commercial concern. No prior consent was obtained for such use and the Municipality began to implement a monthly penalty tariff of R3,592.

Aggrieved by the Municipality’s decision, the respondents approached the High Court, which held that the Municipality was not permitted to implement a penalty tariff until it had first amended its general valuation roll or issued a supplementary roll.

On appeal, the SCA held that the Municipality had validly adopted and implemented a property rates policy. This permitted the application of a penalty tariff where property owners refused to adhere to the Municipality’s land use scheme, as set out in the policy. The High Court had not appreciated the unreasonable administrative burden that would be created in the event that the Municipality was required to amend its general valuation roll or issue a supplementary roll with regard to each instance of illegal land use.

The appeal was upheld with costs.