On Purchasing PropertyLocal government - municipal services debt - charge upon property


In Jordaan and Others v City of Tshwane Metropolitan Municipality and Others [2017] ZACC 31, the Constitutional Court considered the constitutionality of section 118(3) of the Local Government: Municipal Systems Act, 2000 (MSA). The provision stipulates that any amount owed for municipal services is a charge upon the property in question and has preference over any mortgage bond.

Two metropolitan municipalities suspended or refused to contract for municipal services with regard to various property owners. This was because of outstanding municipal debt incurred by the sellers. In other words, the purchasers were required to settle historical municipal debts before they could be provided with services. Consequently, they complained that they had to endure inhumane conditions as a result of the sellers’ having failed to meet their obligations towards the municipalities.


The municipalities argued that, to fulfil their duties in respect of service delivery and for the greater good, they required extraordinary debt collection measures. This entailed burdening the purchaser with responsibility for the debt. However, they conceded that nothing prevented them from enforcing their claims against the sellers. For example, they could obtain an interdict, preventing transfer until the debt had been paid.

The Constitutional Court held that the imposition of unlimited debt on a purchaser contravened the prohibition against the arbitrary deprivation of property, contained in the Bill of Rights. The charge upon the property, created under section 118(3) of the MSA, does not survive transfer to the purchaser.

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