Jordaan and Others v City of Tshwane Metropolitan Municipality and Others

The applicants were individuals and companies who had recently acquired properties within the jurisdictions of the City of Tshwane and the Ekurhuleni Metropolitan Municipality. After transfer, the municipalities either refused to conclude municipal service agreements or suspended municipal services unless the new owners paid historical municipal debts incurred by previous owners. 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 was said to survive transfer to a new owner. The municipalities appealed, and the matter came before the Constitutional Court for confirmation of invalidity and determination of the correct interpretation of section 118(3).

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

This case authoritatively resolved longstanding uncertainty created by conflicting Supreme Court of Appeal decisions regarding municipal charges and historical debt. It clarified that municipalities cannot recover pre-transfer debts from new property owners under section 118(3), thereby protecting property rights and legal certainty in conveyancing, mortgage lending, and municipal credit control. The judgment has major implications for local government finance, property transactions, and constitutional property law.