The Constitutional Court has ruled that new homeowners are not liable for historical debt incurred by previous owners.
Gia Nicolaides, EWN reporter says the ruling is great news, especially for new homeowners. She explains that this application was brought before the courts by a number of new homeowners who are relatively recent transferees of municipal properties.
Essentially, they owed municipalities for services rendered to these properties they bought before the transfer.— Gia Nicolaides, EWN reporter
Municipalities required new homeowners to pay historical municipal debt.— Gia Nicolaides, EWN reporter
Nicolaides explains that a high court ruling said the new homeowners are not liable for historical debt. The municipalities in question are the Tshwane and Ekurhuleni municipalities. Nicolaides goes on to say both municipalities came forward and said they looked at the Municipal Systems Act and based on the security provision it shows that historical debt can be incurred by the new owner.
The real matter here is years gone by says Nicolaides adding that the court ruling stipulates that municipalities will have to go after the previous homeowners.
A debt specialist who has been in the middle of the case said new homeowners were almost blackmailed because municipalities would cut off electricity and other services.— Gia Nicolaides, EWN reporter
Nicolaides reports that the municipalities, who are respondents in the case will have to pay for the costs incurred in this legal battle.
Listen to the EWN report in the audio clip below: