Category: Crushing Debt
Municipalities cannot hold a new property owner liable for a previous owner’s historical municipal debt, the Constitutional Court ruled on Tuesday.
The precedent-setting ruling gives relief to home and business owners, who have been saddled with years of historical municipal debt – as long as 20 years – and have been denied municipal services until the debt had been paid. The outstanding debt relates to water, electricity, rates and taxes associated to a property.
In a ruling majority written by Justice Edwin Cameron, the court found that upon transfer of a property, a new owner is not liable for old municipal debt. The court upheld a ruling by the high court in Pretoria in November last year – mainly that the liability of the old municipal debt rests with the previous owner.
There has been a substantial increase in financially distressed consumers applying for debt review in the past financial year.
Neil Roets, CEO of debt counselling firm, Debt Rescue, said the company had shown a growth rate of well over 20% in the number of clients seeking debt counselling.
Earlier this week, Capitec bank also reported that it had notched up a 20% growth in its clients that had applied for debt review. The bank said 15% more customers had handed in retrenchment letters as supporting documents to be placed under debt review….