23 Jul 2012
This supplementary valuation roll has been targeted at a substantial number of Johannesburg properties that the municipality considers to have been undervalued in their general valuation roll, which was implemented on the 1 July 2008, as well as properties that were incorrectly categorised by the municipality ab initio.
Ben Espach, director of valuations at Rates Watch, says because of the long delay in compiling this supplementary roll there has been widespread criticism and public outcry regarding the legality and fairness of this roll.
Espach explains that in terms of section 78(1) (a–g) of the Municipal Property Rates Act (MPRA), a municipality must, wherever necessary, cause a supplementary valuation to be made in respect of any rateable property affected by any of the criteria contained in this section.
The clause that affects most of the property owners targeted in the ninth supplementary valuation roll is section 78(1)(e) which states that “any property that has been substantially incorrectly valued during the last general valuation roll can be revalued by way of a supplementary valuation”.
It is important to note that rates on incorrectly valued properties cannot be backdated and can only be implemented from the date of the supplementary valuation roll in which the entry appears, he says.
Property owners are asked to check their rates accounts to make sure that the adjusted rates are applicable from the effective date.
The ninth supplementary valuation roll of Johannesburg will be effective from the 1 August 2012.
However, he says a crucial factor and probably a saving grace for property owners, is that the date of valuation for a supplementary valuation has to be the date of valuation applicable to a general valuation roll.
The date of valuation for the Johannesburg general valuation roll of 2008 was 1 July 2007.
This means that the Johannesburg municipal valuer has to determine the municipal valuation of all properties that he has deemed to be incorrectly valued or undervalued as at the 1 July 2007 and not a current date, he explains.
He notes that the Johannesburg municipality has also rectified certain category entries relating to errors or mistakes made by the municipal valuer in the compilation of the general valuation roll.
These corrections to the category entries are made in terms of section 78(1) (g) of the MPRA - in the case of a category change, the effective date is the date that the change occurred, he says.
Espach points out that where a municipal valuer has made an error relating to a category entry ab initio, the change has to be the date of the original general valuation roll.
“Therefore, property owners affected by a category change relating to an ab initio error will have their rates account amended retrospectively to the 1 July 2008.”
This will undoubtedly cause affected owners substantial hardship, he says.
The ninth supplementary valuation roll contains approximately 83 000 properties and not all the entries relate to corrections.
Certain entries reflect routine supplementary changes such as subdivisions, consolidations and rezoning.
He says what are most irregular are the supplementary valuations that have overturned the municipal valuer’s own previous decision regarding his consideration of an objection - or more amazingly - a decision of the board.
The function of the board is to consider all appeals and to hand down judgements relating to appeals heard by the board.
Unless a high court application is obtained to dismiss the findings of the board, its judgement is final.
“It will be interesting to see how the municipal valuer of Johannesburg persuades the board that its decision was incorrect.”
Espach says one wanders if the municipal valuer has locus standi regarding these particular matters.
He notes that this is most irregular – the MPRA does not give the municipal valuer any right of recourse against a judgement of the board and this action is in conflict with judicial process.
“From an analysis of the valuation screenings undertaken by Rates Watch on behalf of its clients, approximately 80 percent of such entries were found to be incorrect and are now overvalued.”
What steps need to be taken?
Espach says there has been much hype regarding the fairness and legality of this ninth supplementary valuation roll.
There have been rumours that there may be high court applications to set the roll aside.
However, it is most important that all property owners affected by this supplementary valuation roll should lodge objections against the entries affecting their property.
If this is not done, then they are denied the right of review by the municipal valuer and thereafter by the Valuation Appeal Board.
The Johannesburg Valuation Appeal Board is currently chaired by Advocate A. Viviers who is well experienced in the handling of valuation appeals.
An appeal will only succeed if it is based on correct and accurate facts.
Emotional issues and the increase in rates and taxes will not be taken into account by the board.
Espach advises property owners to lodge their objections.
When a section 53 notice advising of the municipal valuer’s decision regarding the objection submitted has been received, then one can request proper reasons for the decision of the municipal valuer if the decision is not in line with the relief requested.
Once the reasons have been furnished, the merits of lodging a successful appeal will depend on the accuracy of the information supplied by the municipal valuer.
It will depend on the quality of the market related evidence in a property owner’s possession to substantiate an appeal, he adds.
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