Before section 78 of the Local Government: Municipal Property Rates Act (“MPRA”) was amended (on 1 July 2015), if a municipality wanted to re-value or re-categorise a property for rating purposes at any time other than on a general valuation roll (which only happens once every 4 to 5 years) it was legally obliged to put the property on a supplementary valuation roll. This was referred to as a “supplementary valuation” and it was done in terms of section 78(1) – (4). The supplementary valuation roll needs to be advertised to the public in newspapers, the government gazette, and put on the municipality’s website.
The municipality would need to send a notice to the property owner advising the owner of the fact that the property was going to be re-valued/re-categorised, and advising where and how to inspect the supplementary valuation roll, as well as when and how to lodge an objection to the supplementary valuation. If the property owner’s objection was not decided in its favour, it could appeal to the Appeals Board.
A completely different process, called a review (in terms of section 52 of the MPRA) would be triggered if the result of an objection was that the property value increased or decreased by more than 10%. This would trigger the Appeals Board reviewing the decision of the municipal valuer, and this process happens automatically without the need for anyone to apply for it, and further it happens without any notice to any person that it is happening.
The new (amended) section 78
The most important amendments are to section 78(5) and (6), which (after amendment) now read as follows:-
(5) (a) A municipal valuer must on completion of the supplementary valuation contemplated in subsection (1)(a) to (g), and following a correction contemplated in subsection (1)(h), serve the results of the supplementary valuations or corrections contemplated in subsections (1)(g) and (h), by ordinary mail, or if appropriate, in accordance with section 115 of the Municipal Systems Act, on every owner of property who has been affected by a supplementary valuation contemplated in subsection (1)(a) to (g) and a correction contemplated in subsection (1)(h), a notice reflecting the supplementary valuation or correction of the property, as well as the particulars listed in section 48(2);
(b) The notice referred to in paragraph (a) must inform the property owner that he or she may lodge a request for review with the municipal manager in writing, within 30 days after the posting of the notice in respect of any matter reflected in the supplementary valuation.
(c) The municipal valuer may adjust the valuation on consideration of the request for review contemplated in paragraph (b).
(6) The municipality must, at least once a year, compile and publish a supplementary valuation roll of all properties on which a supplementary valuation, as contemplated in subsection (1) was made, including review decisions referred to in subsection (5)(b), and make it public and available for inspection in the manner provided for in section 49.
The amendments to section 78 introduced a new mechanism for the municipality to re-value/re-categorise properties.
The ‘old’ procedure under section 78(1) – (4) required that a municipality put a property onto a supplementary valuation roll when it wanted to re-value or re-categorise it at any time other than while a general valuation roll was open.
However, the newly inserted section 78(5) empowers a municipality to re-value or re-categorise a property simply by sending the property owner a notice to that effect.
Rates based on the revaluation/re-categorisation become payable either immediately or from the 1st day of the month following the date of posting of a section 78(5) notice, regardless of whether the property owner follows any review/objection procedure to dispute the change.
The municipality is then obliged when the next supplementary roll is published, to put the property onto that roll so that the owner can (if they chose) object formally to the re-valuation/re-categorisation that was done in terms of section 78(5).
Rates continue to be charged on the revised value/categorization until the dispute is finalised, at which point they are reversed if it is ultimately determined that they should not have been charged in the first place. Very much a “pay now, argue later” mentality.
What does this mean for owners who receive section 78(5) notices?
An owner who receives a section 78(5) notice can do one of three things:
- If the owners is happy with the revised valuation/categorization, the owner can do nothing and pay the charges.
- If the owner is unhappy with the re-valuation/re-categorisation, the owner file a “review” letter, stating his/her/its reasons for not wanting the proposed re-valuation/re-categorisation from going ahead. The municipality can accept or reject this.
- If the owner is unhappy with the re-valuation/re-categorisation, the owner can chose to do nothing until a later stage when the property appears on the next supplementary roll, and then file an objection to the proposed re-valuation/re-categorisation from going ahead. In this case the owner will simply follow the normal objection/appeal/review process to its conclusion.