Jordaan and Others v City of Tshwane Metropolitan Municipality and Others

The applicants were individuals and companies who had recently acquired ownership of properties within the jurisdictions of the City of Tshwane and Ekurhuleni Metropolitan Municipalities. After transfer, the municipalities refused to conclude municipal service agreements or suspended municipal services unless historical municipal debts incurred by previous owners were paid. The municipalities relied on section 118(3) of the Local Government: Municipal Systems Act 32 of 2000, which provides that municipal debts constitute a ‘charge upon the property’ enjoying preference over mortgage bonds. The High Court declared section 118(3) constitutionally invalid to the extent that the charge survived transfer to a new owner. The municipalities and the Minister appealed to the Constitutional Court, and the matter also came before it for confirmation of constitutional invalidity.

The appeals succeeded. The order of constitutional invalidity was not confirmed. It was declared that upon transfer of property, a new owner is not liable for municipal debts incurred before transfer under section 118(3) of the Local Government: Municipal Systems Act 32 of 2000. The municipalities and the Minister were ordered to pay the applicants’ costs, including the costs of two counsel.

This judgment definitively resolved conflicting interpretations of section 118(3) and overturned earlier Supreme Court of Appeal authority suggesting that the municipal charge survives transfer. It protects property purchasers, mortgage lenders, and the integrity of the deeds registration system by confirming that historical municipal debts do not attach to property after transfer. The case is a major authority on the interaction between municipal finance powers, property law, and section 25 of the Constitution.