- The Mercury
- 17 Feb 2016
IMAGINE buying a property and then discovering you are being held liable for rates, refuse, electricity and water charges going back as far as 30 years.
That is the nightmare scenario being faced by all purchasers following a Supreme Court of Appeal ruling which The Mercury reported on yesterday. How could a court comprising such august judges reach such a decision?
It is hard to understand as it is desperately unfair for a new owner to be saddled with debts for which they had no responsibility. And the sums involved could be huge, with new property owners now able to be held liable for historic debts dating back three decades.
With the tough economic climate exacerbated by an unusually high increase in interest rates last month, the property sector is already under pressure. But this ruling by the appeal court will be more than enough to make buying and selling a pit of quicksand for owners, buyers, attorneys and even banks.
Before lending mortgage money banks will want to make sure, as far as is possible, that the property concerned is not going to be attached as a result of outstanding debt, with the bank then standing to recoup only that amount which remains after the relevant municipality has taken its slice for historic debt.
Before this 30-year-rule came into effect, the existing situation was bad enough.
New owners – or even tenants – could be held responsible for previous occupants’ debts going back two years. Why?
It must be up to the municipalities to collect monies owing to them, and to institute court proceedings against those who fail to pay. Two years was bad enough; 30 years is ludicrous.
Heaping responsibility for paying on those who had no benefit from the costs incurred merely helps dysfunctional municipalities avoid carrying out their duties.
And as many ratepayers know, it can be hard enough to get last month’s bill sorted out, never mind trying to unravel incorrect estimates, broken meters and illegal connections going back many years. This ruling needs to be retested in the highest courts in the land – and quickly.