The City of Joburg recently won a court appeal regarding the enforcement of business tariffs on residential estates with commercial amenities.
City of Joburg plans to enforce business tariffs on rogue estates
On Monday, 15 April 2024, the Gauteng High Court ruled in favour of the City of Joburg against the Malakite Body Corporate and Greenstone Crest Body Corporate.
These estates were previously charging their operational costs under domestic rates despite running profit-generating facilities like restaurants and gyms, which are non-domestic by nature.
During the legal proceedings, the court pointed out that the presence of a business, such as a restaurant, within a residential estate does not diminish its commercial identity.
The judgment added that such facilities are not merely auxiliary to the residential units but serve a broader commercial purpose, meriting a different tariff structure.
The court’s dismissal of the appeal by the body corporates highlighted their unsuccessful argument that their mixed-use facilities should be billed under residential rates.
The judge clarified that the nature of the activities conducted on the property, especially those aimed at generating profit like dining establishments and fitness centres, necessitates a business tariff due to higher electricity usage patterns compared to typical residential demands.
Additionally, the judgment detailed that any residential property utilised for commercial activities, such as legal offices or other service-based businesses, would similarly be subjected to business tariffs.
This is based on the higher utility usage typical of commercial operations, which includes running equipment like photocopiers, computers, and other business-related machinery.
The City of Joburg has expressed satisfaction with the ruling, reinforcing its stance on the appropriate application of tariffs and maintaining the rule of law in municipal governance.
“The appeal was dismissed with costs, as the Court found the argument by the body corporates that they should not be charged business tariff not persuasive. The appellants did not challenge the City’s existing policy,” the City confirmed in a statement.
The victory is seen as a win for the city’s administration in ensuring that all properties are billed fairly according to their use.
