Legality of rates on EUAs -II

I do not reside or practice in Johannesburg so my understanding of this article may be incomplete. I am also confused by the authors referring to EUAs that are registered as sections. If the intended meaning is that all garages and balconies should be regarded as EUAs and as such should not be valued and consequently not rated I think the authors are misdirecting themselves. In terms of sections 46 and 47 of the Municipal Property Rates Act (the Act) the "market value" of all property must be determined. In terms of section 47 of the Act only sectional title units (sections with their share in common property) are to be valued. If it is a section it must be valued and rated.

I cannot find any suggestion in the Act that EUAs can be valued and therefore no rates may be levied on EUAs. If a garage is a section, it must be valued and rated. If a garage is not a section but an EUA it cannot be rated. The market value of a section is determined by what one gets for ones "buck". If a residential section is sold with an EUA garage then the market value would presumably be higher than if it were sold without a garage. If a similar residential section is sold together with a garage which is a section then the total purchase price may be the same as the price for the residential section with the EUA garage but when viewing the sale the price needs to be analysed, for municipal valuation purposes, into a value for the residential section and a value for the garage section.

If the valuation roll is prepared correctly then a residential section which has an EUA garage (or a garage that is physically part of the section) should have a higher value than a residential section that does not have an EUA garage but may have a separately valued garage section. The trick therefore is to make sure that the values are correct and object to the valuation in the valuation roll if the values are wrong. If an owner fails to object to the valuation he cannot achieve the same result by objecting to the rates assessment – it’s too late then.

The real problem for both the valuer and the owner wanting to prepare an objection is that there is no easy way to annualise prices without a detailed knowledge of what is included in each sale. Within in one scheme it is relatively simple to do the analysis but comparing and annualising sales in separate schemes requires a lot of detailed research. I fear that the problem is really that the municipal valuers do not fully understand the need for this research or simply find it easier not to do the hard work.

It is up to owners to object to get the valuation roll correct. Have I missed something? The authors are objecting to garages etc being subject to sewerage charges, refuse removal etc. They are correct to object to this but these are not issues that arise under the Municipal Property Rates Act. They are governed by other legislation and specific bye laws govern these aspects. All bye laws are subject to a public participation process. Objections to those bye laws should be lodged at the appropriate time.

Donald Moore.