Rent ruling will 'sap councils'

Johannesburg - A High Court order to the City of Johannesburg to pay rent to a property owner on behalf of illegal squatters will divert much-needed funds from the city's crumbling infrastructure, the National Taxpayers Union (NTU) has said.

According to the ruling, the City of Johannesburg is to pay the monthly rental bill for each of the 71 illegal squatters occupying a building in Berea owned by Blue Moonlight Properties 39 (Blue Moonlight). Alternatively, the municipality has to pay each occupant R850 per month for rent if it does not find them alternative housing.

"The municipality can absolutely not handle this [additional expense]," said NTU chairperson Jaap Kelder. "This ruling takes money away from roads and maintenance; it will result in the collapse of Johannesburg's infrastructure.

"[Paying for the squatters] is a government function. There's no way the municipality can handle this."

According to Maurice Crespi of Schindlers Attorneys, which represented Blue Moonlight, it is not the landowner's job to bear the brunt of homeless people's burden. "Ultimately, there has to be money for housing. The constitution provides for it and the court recognised the constitutional obligation."

According to the National Treasury's latest report on municipalities' finances in September, the City of Johannesburg is running a tight ship. It was allocated over R25bn for expenses in 2009/2010, and three months into the financial year had spent just over 25% of its budget.

"It is an important judgment as it also recognises landowners' rights to the use and benefit of their own property," said Crespi.

According to Crespi, Blue Moonlight lost R5m in rental income since 2006 when the building was illegally tenanted. The City of Johannesburg continued to send Blue Moonlight accounts for the building.

Crespi said court papers showed emergency housing had been available, but the municipality failed to move the illegal tenants.

The ruling will set a precedent for other municipalities in the country, said Crespi. "If it goes all the way to the Constitutional Court, it will ultimately define the balance between the competing rights of private landowners, the state and indigent unlawful occupiers."

The High Court will deliver its reasons for judgment on Wednesday.

- Fin24.com