City acts against speculators
STORY: Dave Savides
Strict measures are to be enforced to prevent wealthy property speculators from squeezing out the man in the street when it comes to buying City land. A recommendation tabled in Tuesday’s Exco meeting named a number of changes with regard to policy dealing with the alienation of erven. They are aimed, among others, at stopping those who buy land in bulk with the minimal deposit, hold onto it without doing any development and then re-sell the properties at exorbitant profits.
The item included the following:
• Each tenderer must submit a signed Deed of Sale with their tender
• Each tenderer must submit a bank guaranteed cheque equal to 20% of the upset price of the property, to be used as a safeguard against withdrawal of tenders during the tender consideration period
• The deposits lodged by unsuccessful tenderers shall be refunded
• Failure to lodge the required deposit with the tender submitted shall automatically render the tender invalid
• Tenders must hold good for 24 weeks from the date of opening the tender. Should it be withdrawn during this period, the tenderer shall at the Municipality’s sole discretion, forfeit the deposit
• Tenderers will be allowed to tender for one property only
• The balance of the purchase price must be paid within 30 days from the date of sale
• In the case where the balance of the purchase price is not settled within 60 days of the date of approval, the purchaser shall be in breach of contract and interest will be added as well as the initiation of legal action
• Inclusion of a building clause that compels purchasers to commence with development within two years of obtaining transfer, failing which the agreements are cancelled.
Debate ensued as to whether the new policy would hinder the normal free market process.
Property values
A separate item, reporting on the City’s property evaluation, showed that the total value of 30 198 properties on the General Valuation Roll amounted to over R25.438-billion.
The income generated from the application of the Act is projected at R158.8-million for 2009/10, which will exceed expectations.
A total of 35 appeals, including one from Tata Steel, will be attended to by the Valuation Appeals Board.
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