PROPERTY NEWS - The city of Cape Town has introduced a new monthly cleaning fee that’s causing quite a stir.  

The fee which will take effect in the 2025/2026 financial year, is applicable to specific neighbourhoods and seeks to address the cleanliness of public spaces and litter on public property.

It is important to note that this newly introduced charge is not linked to municipal services consumed at the property but instead, is calculated based on the municipal valuation of the property. 

This recurring monthly tariff is defined as a fixed basic charge/fee on residential properties, including sectional title units and vacant land.

Quite justifiably, this has raised questions within the real estate industry, particularly from managing agents and property practitioners, to determine who is responsible for paying this fee: the owner or the tenant?

Pushback from AfriForum
Simply put, AfriForum is having none of it, and are set to challenge the matter. The civil rights organisation has requested the City of Cape Town to review the new “City-wide cleaning fee” questioning the way it has been added to the municipal budget. 

They reasonably argue that keeping public areas, like streets and parks, clean is a general public service, not an additional charge as though it is a service delivered directly to individual properties, such as waste removal.

According to AfriForum, this fee should be covered by property rates and not added as a separate tariff. 

They assert that including it in this way creates confusion, is unfair to ratepayers, may contravene municipal and fiscal legislation, and national financial rules. 

They’ve requested the City to clarify whether this is legally a surcharge or something else. In the absence of a plausible explanation, they say the charge may be unconstitutional.

Who foots the bill?
Until there is a formal ruling or clear guidance from a court, tribunal or forum, it is the stated  position of TPN Credit Bureau and SBL Incorporated that:

• The terms of the lease agreement between the landlord and tenant will be crucial to determine, at this stage, who is liable for this additional charge.
• If the ‘City-wide Cleaning Sundry Tariff’ is a utility charge, this is contemplated by the TPN lease agreement and more specifically, under clause 11. This clause states that the tenant must repay the landlord all amounts paid by the landlord in respect of charges (plus VAT) levied by service providers supplying services to the premises, including gas, sewerage, refuse removal and all utility charges, other than the levy imposed in respect of the premises.
• Furthermore, the TPN lease makes provision for unexpected tariffs, levies and/or charges under clause 11.6, which states that if the levies, rates and/or taxes in respect of the premises increase at any time during the subsistence of this lease agreement, the landlord is entitled to increase the rental to accommodate such increase in the levies, rates and/or taxes.

As such, property owners are entitled in terms of the TPN lease agreement to pass this cost on to their tenant, or to proportionately increase the rental to accommodate the additional cost. 

In terms of Regulation 5(c) of the Unfair Practice Regulations to the Rental Housing Act, at least two months’ notice of the landlord’s intention to increase the rental should be given to the tenant.

What if the fee is scrapped?
Should a determination be made regarding the lawfulness, fairness, and/or reasonableness of this charge at a later stage by a court, and a credit be passed to the property owner by the municipality, it is only fair that such credit must be refunded to the tenant.

The TPN lease agreement has been carefully drafted to ensure that any unforeseen charges, such as the new ‘City-wide Cleaning Sundry Tariff’, are contemplated and the landlord’s risk substantially mitigated.

The situation is still developing so we’ll need to continue to closely monitor developments and   provide updates as these arise.

What should you do?

• Landlords: carefully review your lease agreements to determine if it adequately makes allowance for unexpected charges.
• Tenants: carefully examine your lease to understand what additional costs you may be liable for.

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