By Sanette Viljoen
The Prescription Act (Act 68 of 1969) stipulates that debt will be extinguished through prescription after a certain period. Various types of debt have different prescription periods.
There are also certain events that preclude prescription, such as any form of tax, which is prescribed only after 30 years, while money you owe your neighbour is prescribed after three years. Where, for instance, the debtor is a minor, his debt cannot be prescribed and prescription will only take effect once he comes of age.
This is how prescription works in the world of municipal accounts:
- Rates and taxes are only prescribed after 30 years.
- All other levies owed the municipality, such as levies for refuse removal, accounts for sewage, electricity and water, etc. are prescribed after three years. Therefore, normal prescription applies to services and levies.
Although prescription takes place automatically municipalities will very seldom write off those amounts. They are not likely to remove those outstanding amounts from your account by themselves and will first try to recover the prescribed debt.
As soon as you acknowledge liability for that account, prescription starts all over again and you may then find yourself liable for it.
Before a landowner signs any acknowledgement of debt to the municipality, he should first make sure that it is not prescribed debt. Any person with a potential prescription case, should see an attorney before perhaps taking a step in the wrong direction.