City of Tshwane Metropolitan Municipality v Uniqon Wonings (Pty) Ltd

Uniqon Wonings (Pty) Ltd, a property developer, developed the Six Fountains Estate township within the jurisdiction of the City of Tshwane. The township consisted of multiple erven created from a single farm property. Uniqon experienced disputes with the municipality regarding how municipal property rates were levied and how amounts payable for purposes of issuing clearance certificates under s 118(1) of the Local Government: Municipal Systems Act 32 of 2000 should be calculated. When Uniqon sought clearance certificates to transfer individual erven to purchasers, the City refused unless all arrear rates for the entire remaining township property were paid. Uniqon contended that only rates attributable to the specific erf being transferred were payable. The High Court largely found in favour of Uniqon, prompting an appeal by the City to the Supreme Court of Appeal.

The appeal succeeded in part. The SCA set aside the High Court orders compelling issuance of clearance certificates upon payment of only an administrative fee and the punitive costs order. It declared that the City must value and rate the remaining township as a single property, but must issue clearance certificates for individual erven once the rates and charges attributable to those erven for the preceding two years have been determined and paid. The respondent was ordered to pay the costs of the application in the court a quo.

This case authoritatively clarifies the interpretation of s 118(1) of the Municipal Systems Act in the context of township developments. It balances municipal revenue collection with developers’ property rights by confirming that municipalities may not withhold clearance certificates for individual erven to enforce payment of debts unrelated to those erven. The judgment provides practical guidance on apportionment of municipal rates and reinforces long-standing principles on the rating of township property.