New house owners not responsible for previous owners’ debt

2016-11-30 06:00

There is good news for new home buyers after the Gauteng High Court has ruled that new home owners cannot be held liable for the “historic debt” owed to municipalities by previous owners. This comes as welcome news since the market was thrown a curved ball towards the end of January this year when the Supreme Court of Appeal ruled that new owners could be held responsible for municipal debt dating back 30 years. The ruling was made in terms section 118 of the Local Government Municipal Systems Act.

Judge Dawie Fourie queried why a municipality was entitled to “visit the sins of a predecessor in title upon innocent third parties when there is no relationship or connection between that party and the debts in question” and declared the section of the Act constitutionally invalid. “We’re delighted to see that the ruling has been declared invalid. Local municipalities do have legal recourse to deal with arrears and expecting new owners to pay a previous owner’s debt is simply ludicrous. Hopefully this judgement will encourage prospective buyers to buy,” said Bruce Swain, managing director of Leapfrog Property Group.

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