Lesedi local municipality has confirmed that nearly R1.9 million in public funds was spent on an unfinished mayoral residence in Heidelberg, but insisted that the properties involved were correctly valued as vacant land and are exempt from municipal rates.
In a written response to enquiries, the municipality said a total of R1 867 532 was spent on improvements to Erf 1812 and Erf 1813 in Bergsig Extension 9, which were earmarked as a mayoral residence.
Building of mayoral house discontinued
According to the municipality, the expenditure was approved by the municipal manager at the time, while council later resolved to discontinue the project before completion.
However, the municipality did not explain why the project was halted after significant funds had already been spent, nor whether any accountability processes followed the decision to abandon the development.
Municipal Manager S’busiso Dlamini said a council resolution was taken to discontinue the building of the mayoral house.
He explained that the properties have been valued in accordance with the International Valuation Standards (IVS) and the South African Council for the Property Valuers Profession (SACPVP) guidelines, employing the sales comparison approach based on their assessment as vacant land parcels as the improvements have not been completed as yet.
“…Once completed, an occupation will be issued instructing the municipal valuer to conduct a supplementary valuation. These properties are categorised as ‘municipal properties’ in the general valuation roll 2024-2029 as they are registered in the name of Lesedi local municipality,” Dlamini said.
He said once construction has been completed and an occupation certificate is issued, a supplementary valuation will be conducted to reflect the improved value.
Mayor’s undervalued Heidelberg home
The Citizen has reported that concerns have been raised about the valuation of Mayor Mluleki Nkosi’s house in the upmarket suburb of Berg En Dal, Heidelberg Extension 12, which appeared to be significantly below market value.
The mayor bought the erf in June 2019 for R640 000, reportedly in cash, and built a double-storey home.
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Despite the substantial improvements, the property is listed on the municipality’s valuation roll at R800 000.
The house on a 2 065m² land was substantially improved with a double-storey house, double garages and an enlarged paved parking area. Its true market value is thought to be more than R3.5 million.
Incomplete construction given as reason for property valuation
Dlamini said the general valuation roll was implemented with effect from 1 July 2024, with a prescribed valuation date of 1 July 2023.
He said, according to the Municipal Property Rates Act, the general valuation roll was required to be compiled and submitted to the municipal manager not less than five months prior to the implementation date.
“At the time of compilation of the general valuation roll, the subject property was undergoing construction. As at the valuation date, construction had commenced but remained at an initial stage, and no completed or substantially completed improvements existed on the property,” Dlamini said.
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He explained that consequently, and in accordance with the principles prescribed by the Act, the property was correctly valued as vacant land for purposes of the general valuation roll.
“It is confirmed that the municipality is presently in the process of issuing an occupation certificate in respect of the subject property. Upon the issuance of such occupation certificate and the formal completion of the improvements, the municipal valuer will be instructed to conduct a supplementary valuation in terms of the Act.”
Dlamini said the supplementary valuation will provide for the valuation of the property in its improved state, and the property category will accordingly be amended from “Vacant Land Residential” to “Residential Properties”.
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