The City of Cape Town will be taking legal action against residents who owe the municipality nearly R1 billion in unpaid rates. Image: Twitter
(The Post News) – The City of Cape Town has announced that it will be taking legal action against residents who owe the municipality nearly R1 billion in unpaid rates. More than 17 000 Cape Town residents are not paying their rates, the City revealed this during the portfolio meeting on Monday.
Finance MMC Siseko Mbandezi said that the City’s debt management processes which includes legal debt action was part of the City’s ongoing efforts to ensure debt levels remain stable and do not pose a risk for the metro and service delivery. “The legal process for municipal debt recovery is not new and is guided by National legislation, municipal by-laws, and the City’s approved credit control policies. The City is compelled to take action,” said Mbandezi. He said that the process seeks to balance the City’s obligation to ensure financial sustainability with the constitutional imperative to treat residents fairly, and to provide for indigent relief where appropriate.
“The City is one of the few, if not the only, metro in South Africa lauded by external agencies for its debt management processes, which is an essential cornerstone of good governance to enable service delivery. The City’s consecutive clean audits attest to the strong management of the metro financially and in terms of governance.
Debt management to ensure service delivery in the City of Cape Town.
Mbandezi said this year the City has availed more than R5,1 bn in budgeted relief for qualifying residents and pensioners and social grant recipients. “The City relies on customers paying their accounts to carry out the high levels of service delivery which they have come to expect. The City works well because our residents are paying their accounts,” he added.
According to the MMC, the average payment ratio for the 12 months ending 31 December 2024 was 97,98% and 97,33% as at 31 July 2025. This shows that the majority of residents continue to pay their accounts and trust in the City’s ability to manage public funds responsibly.
“Thank you to our customers for their support, payments and the trust placed in the City. Those who are struggling are urged to approach the City for help and everyone is encouraged to make use of our various convenient online payment options,” said Mbandezi
From the data, it is clear that the City actively manages and caters for bad debt provision. It also has an active programme to engage with the top 100 debtors, both residential and commercial as well as semi- and State-owned enterprises and government departments.
The City has then decided to disconnect water, electricity and deduct prepaid electricity purchases with the hope that they will recover the owed money by residents. Property owners were warned that if they fail to pay or make alternative arrangements they might face legal action or lose their properties.
“The City continues to urge customers in arrears to come forward, make payment arrangements and avoid harsh debt recovery measures,” Mbandezi said.
According to News24, Bas Zuidberg said that the City might face the increase of residents in arrears and they will be forced to sell or have to keep announcing debt relief. “The trajectory of high annual increases will inevitably lead to this scenario.
“The City handing over 17 000 households to legal proceedings is a sure indication that households are under severe pressure to pay their municipal bills. Additionally, the recent write-offs debt offered to some residents clearly show that the City is on destructive path of stressing households to the breaking point,” said Zuidberg told News24.
In August the City launched a debt write-off programme to help struggling residents with their municipal debts. It urged the residents to make use of the support to lighten the load and increase the culture of payment to ensure stable service delivery.
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