The Gauteng High Court dismissed the estates’ stance that their lifestyle centers are part of residential components.
On Tuesday the Gauteng High Court Local Division in Johannesburg ruled in favour of the City of Johannesburg against two estate corporate bodies for the refusal to pay business tariffs.
Malakite Body Corporate and Greenstone Crest Body Corporate took the City to court to contest being charged commercial tariffs.
The City of Johannesburg argued that the presence of gymnasiums and restaurants within the dubbed them “mixed domestic and non-domestic” entities.
ALSO READ: WATCH: Tshwane residents who owe the city are ‘relatively well off’, says mayor
Court judgement
The court dismissed the estates’ stance that their lifestyle centres are part of residential components as inadmissible
The judgement stated the tariff applied was based on the nature of the service rendered.
Watch a clip of inside Greenstone Crest apartments
“For instance, if a property designated for residential use is utilized for commercial purposes, such as operating a law practice, the appropriate commercial tariff would be applied due to the electricity consumption associated with activities like operating photocopy machines, computer services, printers, and other business-related equipment.
READ MORE: Culture of nonpayment: South Africans ‘feel entitled’
“Similarly, the electricity usage patterns of establishments like gyms or restaurants differ from those of residential dwellings, thereby warranting disparate tariff structures,” the judgement read.
The court encouraged the city to charge the organisations under business tariffs because of excessive consumption of electricity in their gyms and eateries.
City of Johannesburg argument
In their response to the body corporate’s appeal to not be charged commercial tariffs, the COJ asserted that restaurants are businesses that generate income through selling food to guests and residents.
Moreover, it stated that the food places and other businesses inside residential areas merely provided convenience to the residents.
NOW READ: Emfuleni suspended petrol attendant makes over R1m while sitting at home
“It does not change the status of the restaurant from non-domestic to domestic. To have a restaurant in an estate is clearly a ‘perk’, but at the end of the day, the restaurant is commercial in nature and non-domestic. It is not merely ‘ancillary’ to the residential units,” the municipality argued.
Communications and Stakeholder Director Kgamanyane Maphologela said he welcomed the court’s ruling.
“The City of Johannesburg is pleased that the rule of law is maintained, especially against big businesses and massive residential estates which are hell-bent to drag the city to court to avoid paying municipal services,” said Maphologela.
ALSO READ: Breeding a culture of nonpayment
Body corporates’ appeal
The two entities’ appeal was dismissed with costs.
Malakite Body Corporate and Greenstone Crest Body Corporate did not contest the final court ruling and the city’s existing policy, by-laws and tariffs in their submission.