Amid a ballooned debt of R52 billion, the City of Johannesburg is clamping down on defaulting customers as it plans to collect a total debt of R1 billion in unpaid municipal rates this month.
The City’s director for communications and stakeholder management, Kgamanyane Maphologela, confirmed that debt collection was part of the metro’s alternative methods of generating revenue.
He said the metro is quite aware of its defaulting customers.
Among these customers are companies that are contracted to the City as service providers, customers who sell and buy property, but owe the city, along with vacant land properties in arrears, equestrian properties, as well as sectional title properties.
Another cohort of defaulting payers listed properties rented by the City, but landlords have failed to pay municipal services; customers who are currently objecting or appealing the new values of their properties, but have not paid the municipal services.
Additionally, property owners with debit orders in which the City will deduct money from customers with credit or refund to settle the debt for other properties they own.
Maphologela noted service providers were well aware that they should not be in 90-day arrears with the City, as stated by the Supply Chain Management policy.
He, therefore, warned that should they fail to settle their debt of unpaid services, the metro will first deduct the money that is owed before paying for services rendered.
“The City’s service providers who are in arrears with the municipality, including the director’s company properties, will be among the targeted defaulters. In addition, credit control will be affected to the director’s properties whose company municipal accounts are in arrears,” he said.
He urged sectional title property owners to update their accounts and pay off unsettled debt.
“As young professionals live a revolving life, the City would encourage them to enter a debit order which could be mandatory in the future. That way, the sectional title debt will be migrated from the City’s growing debtor’s book.
“Notices will be sent to body corporates to assist the municipality with the collection of their trustees or unit owners. Failure to ensure that, the debt of the unit owners will be consolidated and service termination effected to the body corporate bulk service,” said Maphologela.
He cautioned equestrian property owners, “the bourgeois”, that they would experience the tide of their services being terminated seeing they can afford alternative energy.
“These are properties from the value of R20 million and above, which demonstrates the appetite for preferred lifestyle by owners. Such properties will not only attract service termination, but the City will also attach furniture, appliances etc,” said Maphologela.
Should owners of vacant land properties fail to pay off their debt, the metro will trace other properties owned by defaulting customers, where services will be cut off representing the debt of the vacant land.
Maphologela warned that the City would take legal action “if the vacant landowner is in possession of other properties outside the City of Johannesburg. This demonstrates intent for the owner to invest”.
“If the debt is still not settled, the City will auction the vacant land as this would have demonstrated that the owner can afford more than one property and there is no requirement to provide alternative accommodation on vacant land.”
He further added: “Property owners with objections or appeals, and in arrears, will be advised that the city is aware of the objection process under way and refer these customers to the Municipal Property Rates Act that the municipal bill should be paid until the objection or appeal process is concluded.
“Where property value will be revised down, a refund will be affected with interest. This is intended to prevent future bulk debt that may strain the customers if the property value does not change or increase.”
Maphologela emphasised the city is tightening the belt to recoup the debt in order to render basic services to residents.
“As the City, we will continue to go on aggressive campaigns to collect the huge amount of money that is owed to the city. Residents should understand that without them playing their part by paying for services they consume, we are unable to render services as a municipality,” said Maphologela.
The Star