Analysis of the tacit hypothec : section 118 of the Local Government : Municipal Systems Act 32 of 2000 in light of the CC’s judgment in Jordaan v City of Tshwane

Abstract

Finally, the Constitutional Court has cleared the air surrounding the interpretation of section 118 of the Local Government: Municipal Systems Act 32 of 2000. This dissertation evaluates and examines the interpretation of subsection (1) and (3) of the Systems Act. In this dissertation I argue that the historical debts which subsist in the immovable property extinguish upon the transfer of the property to the new owner. In previous cases the court has held that historical debts incurred in the land by the previous owner do not lapse when the land is transferred to another person. By implication, the court suggested that the municipality does not lose its limited real rights in the property in question even if the property is no longer in the name of the person who incurred municipal service fees. Consequently, the municipality may obtain an execution order against the property in order to recover its outstanding historical debts. It goes without saying that this would have drastic repercussions to the new owner of the property should the local authority decide to execute the land. As such I argue that this interpretation is incorrect for a number of reasons provided in this dissertation. In the recent case of Jordaan vs The City of Tshwane the Constitutional Court provided clarity regarding the interpretation these subsections. Therefore, the problem of this research revolves around the interpretation and the constitutionality of subsection (1) and (3) of the Systems Act