Municipalities’ billing system under fire

2017-04-26 06:02
Natalie Steenkamp

Natalie Steenkamp

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Question:

I am in the process of selling my house. I have approached the municipality for a rates clearance certificate. They have now informed me that I have an outstanding amount of more than R100 000 on my water account, which they say has run up over the last ten years, because I was charged on estimated amounts and not actual metered amounts. I have made sure to always pay my account every month, and now I have to pay this. Surely this cannot be right?

Answer:

In a long line of court cases regarding the responsibility of owners for outstanding debts and the ability of municipalities to recover such from home owners, a strong view in favour of the home owner has been upheld in the recent High Court judgement of Argent Industrial Investments v Ekurhuleni Metropolitan Municipality.

In this case, Argent Industrial (AI) received an account from the municipality in March 2015 that showed an amount was in arrears for R1 152 666,98 after a water meter reading was done by the municipality.

AI paid an estimated water account provided by the municipality every month, with the last actual water meter reading by the muni­cipality only done in 2009. The arrear amount reflects the difference between the actual consumption and the estimated consumption that was already paid by AI.

AI contested the account and argued that they were not liable to pay for any arrears of more than three years prior to March 2015, and any older amounts would have prescribed according to the Prescription Act. The municipality argued that prescription only starts to run when the consumer is billed and that was when the municipality became aware of the existence of the debt.

However, the court held that it was not AI’s obligation to read water meters and calculate their consumption and have everything in order for when the municipality demands payment for the actual consumption of water.

A delay of three years to read the water meters was also held to be unreasonable. The court also disagreed that prescription started running when AI was invoiced and when the municipality became aware of the debt.

Accordingly, the court ordered the municipality to calculate the average monthly water consumption of AI from September 2009 until March 2015, using the meter reading on the muni­cipal account received, and then charge AI only the average amount for water consumption for the period March 2012 to March 2015.

The court effectively found in favour of AI and determined that their debt older than three years was written off in accordance with the Prescription Act.

This finding therefore supports your view that the municipality cannot charge you for ten years of outstanding water readings of which you were not aware. Consult with your attorney to investigate the matter in detail and advise you of your rights, taking into account this recent decision.

– Natalie Steenkamp, associate, Phatshoane Henney Attorneys

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