Cape Town city-wide cleaning fee: who’s responsible – owner or tenant?

The City of Cape Town has introduced a new city-wide cleaning fee, which applies to specific neighbourhoods and aims to maintain the cleanliness of public spaces by addressing litter on public property. This charge is not linked to municipal services consumed at the property but rather calculated based on the municipal valuation of the property.

As defined in the City of Cape Town’s budget, the new City-wide Cleaning Sundry tariff will be introduced in the 2025/26 financial year. This tariff is defined as a fixed basic charge/fee recurring on a monthly basis on residential properties, including sectional title units and vacant land.

Understandably, this has raised questions across the real estate industry, particularly from managing agents and property practitioners, around who is responsible for paying this new fee: the owner or the tenant?

New charge to be challenged by AfriForum

At this stage, it’s important to note that the matter is set to be challenged by AfriForum. AfriForum has asked the City of Cape Town to review the new “City-Wide Cleaning” fee, raising concerns about how it has been added to the municipal budget. They point out that cleaning public areas like streets and parks is a general public service, not something that can be charged as if it’s a service delivered directly to individual properties, such as waste removal.

According to AfriForum, this fee should be covered by property rates and should not be added as a separate tariff. They argue that including it this way creates confusion, is unfair to ratepayers, and might even go against municipal and fiscal legislation and national financial rules. They’ve also asked the City to clarify whether this is legally a surcharge or something else. Without that clarity, they say the charge may be unconstitutional.

Who is liable for the additional charge?

In the interim, until there is a formal ruling or guidance from a court, tribunal or forum, the position of TPN Credit Bureau and SBL Incorporated is the following:

• The terms of the lease agreement between the landlord and tenant will be crucial to determine, at this stage, who is indeed liable for this additional charge.
• If the City-wide Cleaning Sundry tariff is a utility charge, this is contemplated by the TPN lease agreement and more specifically, under clause 11. This clause states that the Tenant must repay the Landlord all amounts paid by the Landlord in respect of charges (plus VAT thereon) levied by service providers supplying services to the Premises, including gas, sewerage, refuse removal and all utility charges, other than the levy imposed in respect of the Premises.
• Further, and alternatively, the TPN lease makes provision for unexpected tariffs, levies and/or charges under clause 11.6, which states that if the levies, rates and/or taxes in respect of the Premises increase at any time during the subsistence of this Lease Agreement, the Landlord shall be entitled to increase the rental to accommodate such increase in the levies, rates and /or taxes.

Accordingly, property owners are entitled in terms of the TPN lease agreement to pass this cost on to their tenant, or to proportionately increase the rental to accommodate the cost. In terms of Regulation 5(c) of the Unfair Practice Regulations to the Rental Housing Act, at least 2 (Two) months’ notice of the landlord’s intention to increase the rental should be given to the tenant in this regard.

What happens if the cleaning charge is later reversed?

Should a determination be made regarding the lawfulness, fairness and/or reasonableness of this charge at a later stage by a court, and a credit be passed to the property owner by the municipality, such credit must be passed to the tenant’s account.

The TPN LeasePack agreement has been carefully drafted to ensure that any unforeseen charges, such as the new City-wide Cleaning Sundry, are contemplated and the landlord’s risk therein mitigated.

Download the latest version of the TPN LeasePack

We will continue to monitor developments closely and provide updates as soon as a determination is made.

Written by the TPN Credit Bureau and drafting attorneys of the LeasePack SBL Incorporated