Unequal before the law - City of Joburg municipal property valuation

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Previous law

In terms of section 78 of the Local Government: Municipal Property Rates Act, before 1 July 2015, a consumer whose municipal property valuation was reduced on objection, appeal or review, was entitled to a retrospective application of that reduced valuation back to the date of the commencement of the supplementary valuation roll on which the valuation of that property was argued and reduced.

Current law

From 1 July 2015 onwards, the law was amended to provide that a consumer who successfully argues for a reduction of its municipal property valuation is entitled to:

1. retrospective application of that reduced valuation from the date of the actual reduction in valuation of the property; or

2. retrospective application from the date of the inception of the general valuation roll to which the supplementary valuation roll that the reduction in value is argued on; whichever occurred later.
   

Meaning

This means that consumers who obtained an objection, appeal or review outcome indicating that their municipal property valuation would be reduced on Supplementary Rolls 1, 2, or 3 to the City of Johannesburg’s 2013 General Valuation Roll, will only be entitled to a retrospective application of that reduced property valuation to the date of commencement of that supplementary roll, and not to a retrospective application of that reduced property valuation to the commencement date of the 2013 General Valuation Roll (which was 1 July 2013 and in all cases considerably earlier than the commencement date of the 3 supplementary rolls mentioned).

Consumers who have obtained (or who will in the future obtain) the same relief (ie a reduction of their municipal property valuations in terms of an objection, appeal or review outcome in respect of Supplementary Roll 4 or future supplementary rolls to the City of Johannesburg’s 2013 General Valuation Roll) will, however, be entitled to a retrospective application of the reduced municipal property valuation to the commencement date of the 2013 General Valuation Roll (being 1 July 2013), or the date that the property value dropped, whichever is later.

This flows from the fact that section 78 of the Local Government: Municipal Property Rates Act was amended, with effect from 1 July 2015, to provide retrospective relief to 1 July 2013 (or the date that the property value dropped, whichever is later) only to consumers whose municipal property valuations were reduced on supplementary rolls that commenced after the date of change of the law (ie 1 July 2015).

Is this unequal treatment lawful?

In terms of our law there is a presumption that a change in legislation applies only going forward, and not retrospectively, unless the legislation that is changing expressly provides for retrospective application (which in this particular case it does not).

This means that until a court declares the situation to be unlawful and makes an order remedying it, we can expect municipalities to comply with the “letter of the law” as it stands (or rather as it stood prior to 1 July 2015).

This means that all consumers who obtained a reduction in their municipal property valuation flowing from a successful objection, appeal or review in relation to any supplementary roll that commenced before 1 July 2015 should not expect to have their reduced municipal property valuation applied further back than the commencement date of the supplementary roll concerned.

As above, until a decision is made by a court declaring this to be unlawful – because it is irrational to treat consumers seeking the same relief after 1 July 2015 in a manner different to those who have already sought and obtained relief prior to 1 July 2015 – this conduct will be considered lawful.

In the authors’ opinion, consumers who are significantly financially prejudiced because of this irrational situation should approach the courts for relief, and a court should logically grant it to them.