CITY OF JOHANNESBURG ILLEGAL PROPERTY TRANSFERS

Today (the 13th of May 2010), the City of Johannesburg Mayoral Committee ordered a crackdown on all possible suspicious property transfers within the City's jurisdiction. This includes bringing in law enforcement authorities to assist internal and external investigators to root out any wrong doing in these transactions.

This follows the uncovering of the various illegal transfers of some of the Council properties which are considered part of strategic parcels and some of them can only be used for Basic Municipal Services (see Star report).

The Johannesburg Property Company (JPC), a business unit managing the property portfolio of the Johannesburg City, recently confirmed to the media that 33 parcels of land which include areas zoned as Public Open Space and Road Reserves have been fraudulently transferred out of the city's Asset Register and sold to third parties which have been subsequently named in Court papers.

The City can also now confirm that all the documentation presented to authorities as "proof of transfer" bear signs of forgery and fraud -while further investigation into these transactions are continuing.

The City's investigation reveals that the properties are being transferred at an abnormal fast pace and in some cases, properties are transferred overnight in the Deeds Office. Current official trends are that it takes up to three (3) months to transfer properties while various processes are being validated.

The City of Johannesburg owns a number of parcels of land which, before releasing to the public for individual or private sector, must first be used for basic municipal service. JPC is the sole agent legally mandated to release and sell council owned property.

This mandate does not allow JPC to appoint any other agent to sell or lease property on behalf of the City.

Residents and other interested parties are advised that a certain strict process must always be followed in the alienation of properties. In the selling and leasing, for instance, the following legal procedures and processes must be adhered to:

"The Municipal Financial Management Act.
"The Asset Regulations,
"Section 79 (18) of Local Ordinance Act,
"The Land Act no 68 of 1981,
"The local Government Municipal Systems Act no 32 of 200, and
"The Transfers Duty Act no 40 of 1949.

Formalities in such transaction are: a parcel of land earmarked for sale or lease is circulated to all city-owned entities and departments for comment to establish whether they require that particular earmarked area. A Ward Councillor of the affected area is also asked to comment on whether that area could be sold or used for a different reason. The councillor then consults with the community. Objections from the community could also result in the property being frozen until such time that objections are adequately addressed with all parties concerned.

Once comments are received, the property in question is presented to Council  where authorisation to release it is given.

If Council does not approve, then the property cannot be sold.  

When Council approves, the property is placed on public tender and the community invited to participate. The City's Executive Adjudication Committee (EAC) then approves the award after ensuring that all process and procedures have been complied with.

In the case of the 33 properties, the process was not followed and the failure to  adhere to this process makes any of those property transactions invalid.

The parties outlined in court papers have proposed to make a settlement deal but the City rejected that approach. The City's view is that this is a matter for the law agencies and as such, it has been reported to the police and relevant state security agencies.

In the past months, the City started a legal process of charging other fraudsters who have also attempted to sell land illegally purporting to be agents of the City. One of the fraudsters is currently in jail and this has given the city confidence  that if the law is allowed to take its course, these illegal activities can be effectively stopped from continuing.

"I would like to assure the citizens of Johannesburg that all land acquired fraudulently by third parties will be returned back to the City and that all relevant security agencies will be involved in this process", said the Executive Mayor, Clr Amos Masondo.

"We therefore appeal to the public to be vigilant and not to be misled by agents who claim that they are appointed by the City or Johannesburg Property Company.

We please call upon anyone aware of any fraudulent or corrupt activities to report to our Anti-Corruption Hotline 0800002587", or the law enforcement agency at 10111, said Masondo.

Statement issued on behalf of the Executive Mayor of Johannesburg, Clr Amos Masondo, May 13 2010

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