LEGAL MATTERS SPONSORED BY STBB new developments is paid by direct beneficiaries so that existing residents do not continue to subsidise new developments . The incidence of the payment is also immediately apparent as the landowner pays and , to the extent that the market permits , the landowner will pass these costs on to the purchaser of the property .
NOT MANDATORY :
The wording of the Bill suggests that the imposition of development charges by municipalities on landowners is not mandatory and remains within the discretion of municipalities .
RESOLUTION , POLICY AND BY-LAWS :
In circumstances where a municipality elects to impose a development charge , a resolution to do so must be adopted by the municipal council . The development charge must be imposed by the competent authority as defined in SPLUMA ( the Municipal Planning Tribunal ) as a condition for approving the land development application . Unless otherwise provided for in the conditions of approval , a landowner will have to pay the full amount of the projected development charge before exercising the rights as approved .
The municipality must then prepare and adopt a policy for the raising of development charges in a fair and equitable way . The policy must outline the methodology for the calculation of a unit cost per municipal engineering service , specify any municipal engineering service zones and can provide that a municipality may allow for payment to be done in tranches for identified categories of land development .
The policy may provide for the municipality , at its own instance or on request by a landowner , to increase or decrease the calculated impact of a land development on external engineering services to reflect the actual anticipated demand for one or more of the required external engineering services . In such an instance , the adjustment will be calculated at the expense of the landowner who must use the services of a registered professional engineer . Subsequent to the adoption of the policy on development charges , a municipality must adopt and publish by-laws in terms of sections 12 and 13 of the Municipal Systems Act to give effect to its implementation .
ENGINEERING SERVICES AGREEMENT :
Where an approved land development project requires the installation of internal or external engineering services , an engineering services agreement must be concluded between the developer and the municipality . This agreement must set out whether the municipality or the landowner will be responsible for installing the internal or external engineering services in respect of the approved development . Further details that the agreement must provide for , include : an outline of the nature and extent of the internal or external engineering services to be installed by either party ; the commencement and completion of the installation ; and the engineering standards in which the installations must conform to .
Where the municipality is responsible for the installation of bulk engineering services and fails to do so within a prescribed period , it must reimburse the landowner for the relevant portion of the development charge .
EXCLUSIONS :
Levies for certain categories of landowners and developments may be subsidised or exempted , provided they are in line with the approved municipal policy framework and by-law . Where an exemption is granted , the municipality must identify an alternative source of revenue for providing external engineering services .
ACCOUNTING :
In terms of accounting , the development charges collected by municipalities are not to be regarded or recorded as a general source of revenue , but must be reflected as a liability in their financial statements . This is because the development charges collected must be used for purposes of funding or acquiring capital infrastructure assets . Once the charges have been utilised for that purpose , the charge may be recognised as revenue .
Members of the public are invited to submit written comments on the Bill by 31 March 2020 , via email to Development . Charges @ treasury . gov . za . Enquiries may be directed to Mmachuene . Mpyana @ treasury . gov . za .
STBB offers a variety of legal services where our expertise and friendly approach allows us to deal with every legal matter in an effective and efficient manner ensuring a pleasant experience for our clients .
In the property sector we cover :
• Property law : We offer benchmark services for both retail and development property transactions . We are reputed for our teams of seasoned property law practitioners who share an extensive set of skills to smoothly address every aspect of property law and land development transactions .
• Local Government , Planning , Development and Environmental law : Our Development Law Unit has nine specialists addressing development requirements in the fields of planning law , environmental law , construction law , renewable energy law and local government law . The Unit partners with land developers to function as a vital watchdog and one-stop-shop for all legal requirements of land development projects , including low cost housing projects .
For more information related to the information published , please contact Gert Minnaar at gertm @ stbb . co . za or visit our website www . stbb . co . za to view contact information for your nearest branch .
www . saaffordablehousing . co . za JANUARY - FEBRUARY 2021 21