Update on Municipal Land Disposal

Dear Members,

Update on the Municipal Land Disposal Process 

On Thursday 29 June 2023, the Bitou council convened to consider and decide on their proposed disposal of 17 properties, initially advertised and identified for disposal on 16 March 2023. The community responded with many submissions to the municipality.  As stated in an addendum to the council agenda for the 29 June meeting, the following was recommended;

Erf 993 and 1496 in Kranshoek, with a value of R1.730 million are proposed for sale to encourage the development of a local shopping centre, which is required in the area.

Portion 41 of Farm 437, North of New horizons, with a value of R1.035 million, where both the Municipality and the Ratepayers’ Association considered this a potential site for a solar PV site. Nevertheless, the council has proposed disposing of it.

Portion 3 of Farm 437, on the N2 close to Ebenezer, with a value of R 1.245 million, to be sold with the aim of establishing a shopping centre. Ratepayers’ Association cautioned on a possible traffic and pedestrian hazard on the N2, as the area is situated close to a school, New Horizons and Kwanokuthula.

10 undeveloped residential erven in New Horizons, with a cumulative value of R1.845 million, are to be sold, as intended, to private aspirant homeowners.

The properties for which no final decision has been made include Erf 117 Kurland and Erven 256, and 1725 A in Plettenberg Bay;

On Erf 117 Kurland, a decision has been deferred as the valuation of the property has not been determined.

On Erven 256, 1725 A and B in Plettenberg Bay where, following the Ward 2 report back meeting of 6 June and subsequent communications with the municipality, unfortunately many questions still remain.

In order for us to better understand the background pertaining to these two properties, we requested a copy of the relevant agreements, as well as all related correspondence. Unfortunately, we were told that we need to apply for the information by means of the protracted PAIA process. We have therefore submitted an application and will keep members posted on progress.

The land disposal matter was on the agenda for the Council meeting held on 29 June.

With regard to Erf 256 (along Longstone Park), the Municipal Manager informed the Council meeting that it needs further investigation and that they will speak to the “developer.” It is not clear why there would be a specific “developer” at this stage, when the property is yet to be publically advertised for disposal by a public tender process.

The Municipal Manager also reported that on 31 January 2023, the Council had renewed the 2008 agreement with A&N Property Developers for Erf 1725 at the price agreed to 14 years ago. We understand this to be of the order of R350 000, but this is one of the unknowns. We have also been informed that the award was for Erf 1725 in totality and not only for the A portion, yet another aspect requiring clarity.

The Municipal Manager reported that Erf 1725 B (playground) would be removed from the list of properties to be sold. This commitment was made at the Ward 2 meeting on 6 June and confirmed at the Council meeting, which will be appreciated by the community.

Many Questions Remain Unanswered.

  1. In terms of Erf 1725A, our view is that case law reflects that unless an award has been offered in “perpetuity”, in an award made 14 years ago, the Council, has the right to, and should, terminate the contract. Further, our view is that the MFMA requires that a municipality may only sell assets at market value. So why would the Council want to sell the property at a 2008 price?
  2. Why would the municipality renew this award in January 2023, without addressing the issues of market value and subdivision?
  3. In terms of Erf 1725A, why has the municipality not addressed the well-established servitudinal rights held by the owners of the adjacent Erf 1727, who will have to be compensated for the loss of those rights. The cost will probably be far in excess of the value of the property. That is even before the inevitable legal costs that will result from such a decision.
  4. In terms of erf 256, how can a developer be chosen without having gone through the tender process?

This note reflects our best understanding of the facts at our disposal. The fact that many questions remain unanswered and the agreements are being withheld can only lead us to believe that “the full story” is yet to be told.

Kind regards,
Steve Pattinson