Municipalities across SA are already under financial strain, struggling to maintain infrastructure, deliver basic services and balance budgets.
Therefore, every rand around each municipality’s coffers counts.
It is in this context that the decision by the Buffalo City Metro to write off R27m after losing a property rates court battle is more than just a financial setback — it is a clear indictment of administrative failure and weak governance.
Let’s be clear, this was not unavoidable. At the centre of the issue is a basic but costly mistake — in 2017 and again in 2022 evaluations, the municipality incorrectly classified a social housing provider, Own Haven Housing Association (OHHA), under the wrong property rating category.
This error triggered a legal dispute that ultimately ended in court, where the municipality lost — and taxpayers lost with it.
Originally, the metro had billed OHHA nearly R33m for the period between 2019 and 2025.
But after the ruling, only about R5.9m was deemed payable, forcing the city to write off the remaining R27m.
This raises uncomfortable but necessary questions.
How does a municipality misapply its own rates policy to such an extent?
Property categorisation is not a grey area — it is a core administrative function that directly affects revenue collection and financial sustainability.
Complexity is not an excuse for poor implementation
Supporters of the metro might argue that the legal framework around social housing classification is complex.
Indeed, the dispute partly stemmed from how the law treats social housing institutions versus public benefit organisations (PBOs).
But complexity is not an excuse for poor implementation.
Municipalities are expected to have the expertise — or to seek it — before making decisions with multimillion-rand implications.
Surprisingly, it has taken BCM close to eight years to amend its policies “to introduce a new rating category for social housing institutions, with a tariff equal to that applied to PBOs”.
To make matters worse, the court ordered BCM to pay 20% of the legal costs in the matter.
The money lost through these avoidable legal errors could have gone toward service delivery.
There is also a credibility issue. Ratepayers who diligently pay their municipal bills may justifiably feel frustrated when millions are written off due to administrative mistakes.
We have reported on similar write-offs before which caused rumblings among ratepayers — R100m for city businesses in 2022 and R1.6bn in irregular expenditure in November 2025.
Ultimately, any write off is not just about millions and billions lost. It is about accountability.
If municipalities are to regain public confidence, there must be consequences for costly errors, improved internal controls and a commitment to getting the basics right.
Because when governance fails at this level, it is not the institution that pays — it is the public.
Daily Dispatch
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