Section 229 of the Constitution of the Republic of South Africa states that municipalities may impose rates on property and surcharges on fees for services provided by or on behalf of the municipality, and, if authorised by national legislation, other taxes, levies and duties appropriate to local government or to the category of local government into which that municipality falls. These powers of municipalities are enshrined in the Municipal Systems Act 32 of 2000 (as amended) (“the Systems Act”) and Municipal Property Rates Act 6 of 2004 (as amended) (“the Rates Act”).

A ratepayer is liable to pay property rates and such rates are a recoverable debt in respect of taxation in terms of section 11 of the Prescription Act 68 of 1969 (as Amended). A ratepayer remains liable for the payment of the rates regardless of whether an account has been received or not, and if an account has not been received, the ratepayer should make the necessary inquiries to the municipality to establish the amount due for the rates and to pay that amount to the municipality. Section 27(2) of the Municipal Property Rates Act 6 of 2004 (as amended) states that:

“(2) A person is liable for payment of a rate whether or not that person has received a 15 written account in terms of subsection (1). If a person has not received a written account, that person must make the necessary inquiries from the municipality.”

Not receiving an account does not absolve a ratepayer from liability to pay rates as there is a duty placed on ratepayers to make inquiries if no account is received from the relevant municipality.

A 3-year prescription period applies to debt not mentioned in section 11 of the Prescription Act 68 of 1969, such as debts, including but not limited to, debts arising from a breach of contract between private parties or a debt arising from a cause of action in delict relating to bodily injury etc. Any debt owed to the State in respect of any share of the profits, royalties, or any similar consideration payable in respect of the right to mine minerals or other substances attracts a 30-year prescription period.

Section 11 of the Prescription Act states as follows:

“11. The periods of prescription of debts shall be the following:

(a) thirty years in respect of-

(i) any debt secured by mortgage bond;

(ii) any judgment debt;

(iii) any debt in respect of any taxation imposed or levied by or under any law;

(iv) any debt owed to the State in respect of any share of the profits, royalties or any similar consideration payable in respect of the right to mine minerals or other substances;”

Property rates, sewerage and refuse charges fall within the bracket of the thirty (30) years period of prescription. This means property rates, sewerage, and refuse charges will only be extinguished by prescription once thirty (30) years have lapsed. Placed in a practical scenario, should a ratepayer fail to pay property rates for months, the municipality will be legally entitled to recover those debts within thirty (30) years from the date on which the debt became due, i.e. when the ratepayer ought to have been aware of the debt.

Conclusion

It is highly advisable to keep abreast with your local municipality regarding liability for rates as ratepayers remain liable for municipal rates and debts owed to municipalities only prescribed after 30 years.

Written by Msizi Mhlongo, SchoemanLaw