After failing to renew its lease, overstaying for six months and racking up R4.6m in arrears, the Nelson Mandela Bay municipality has been told to pack up and vacate the offices used by its budget and treasury directorate.
The municipality was sent a letter from Kaplan Blumberg Attorneys in September, warning it to vacate the Murray and Roberts building at 186 Govan Mbeki Avenue in Gqeberha by October 31.
However, the metro has yet to vacate the building.
In a scathing letter, Kaplan Blumberg head of litigation Kyle Vermooten said the municipality’s blatant disregard for contractual obligations was not just a breach of law but a shameful betrayal of public trust.
“As the supposed guardian of civic responsibility, you must honour every debt without excuse or delay, setting an uncompromising example of integrity for citizens you claim to serve,” he wrote.
“Anything less exposes you as hypocrites unfit to lead, inviting scrutiny, accountability and the full force of justice to rectify your failures.”
Vermooten confirmed on Tuesday afternoon that the firm would proceed as per the letter of demand with the eviction proceedings and recovery of all rental arrears and restoration costs.
As the supposed guardian of civic responsibility, you must honour every debt without excuse or delay, setting an uncompromising example of integrity for citizens you claim to serve. Anything less exposes you as hypocrites unfit to lead, inviting scrutiny, accountability and the full force of justice to rectify your failures.
— Kaplan Blumberg Attorneys’ head of litigation, Kyle Vermooten
Acting city manager Lonwabo Ngoqo had on Friday requested a month-to-month lease for up to a year while the municipality reopened the tender process for new office space.
He said a forced relocation from the building at such short notice would have severe effects on municipal operations, disrupt intergovernmental co-ordination and adversely affect public services.
Kaplan Blumberg Attorneys claims the municipality failed to maintain the building, causing significant damage, and defaulted on payments under a month-to-month agreement since the lease expired in March.
On Monday, budget and treasury political head Khanya Ngqisha said the debt would be settled.
“It is for services rendered and has to be paid,” he said.
He said the management of buildings fell under the corporate services department.
“They have gone on tender twice and had to cancel the process because bidders did not meet the requirements.”
Corporate services executive director Nosipho Xhego said the department was still in negotiations with the landlord.
“We went out on tender and there were requirements,” she said.
“We then had to cancel the process because the tenders submitted were non-responsive, which means they did not meet all the requirements.
“We have requested that we make a shorter lease and go out on tender again.”
A three-year lease was signed in April 2022 for the building at R289,580 a month, R32,000 for parking and R22,138 for service fees.
The lease ended in March and since then, according to the leaked September 30 letter by Vermooten, the municipality has not been paying the correct rental, if any at all.
This resulted in rental debt of R3.9m.
The outstanding balance is for damages to the building.
Despite wanting the municipality out, Vermooten said it remained liable for full rentals until the premises were restored to the condition they were in at the date of occupation.
“The municipality is contractually obliged to restore the premises in good order and condition at [its] own expense, or to reimburse our client for any costs incurred in repairing the premises,” his letter reads.
Vermooten said the municipality had breached the agreement by failing to maintain the building and, as a result, it had been significantly damaged.
“The parties agreed to various restoration arrangements whereby our client would attend to work and invoice the municipality for any costs incurred,” he wrote.
“Despite [the landlord] attending to the initial work and submitting its accounts as per the agreement, the municipality failed and/or refused to make payment of these amounts.
“Accordingly, all restoration work was stopped.
“The premises remain in urgent need of restoration, and the municipality is hereby demanded to begin restoration as a matter of urgency.
“Until the premises are restored to the condition they were in at the date of occupation, the municipality remains liable for the full monthly rental payments.”
Invoices submitted for the damages total R641,952.68 and, according to the letter, remain unpaid.
Vermooten said no short-term lease agreement would be considered.
“Our client has been in discussions with the municipality regarding the signing of a new three-year lease agreement, but despite extensive efforts by our client, the municipality has failed and/or refused to agree to a new lease agreement, demonstrating a clear disregard for its obligations,” he wrote.
“The municipality is hereby notified that our client remains amenable to the signing of a further three-year lease agreement on the same terms and conditions as per the previous agreement, subject to restoration being completed by the municipality and all arrears being settled upfront.
“No short-term lease agreement will be considered, and any further delays will not be tolerated.”
In the reply sent on Friday to Vermooten, Ngoqo said the landlord was acting unreasonably and in a manner that was inconsistent with the statutory framework.
“The Murray and Roberts building houses a substantial number of employees, including those in the budget and treasury office and related administrative units, whose functions are essential to the municipality’s financial governance and service delivery,” he wrote.
“The forced relocation of these units on such short notice would have a severe ripple effect on municipal operations, disrupt interdepartmental co-ordination and adversely affect the public services rendered to the residents of Nelson Mandela Bay.
“In this context, the landlord’s position appears disproportionate and inconsistent with the principles of co-operative and reasonable engagement expected in dealings with an organ of state performing constitutionally mandated functions.
“By insisting on a renewal that would contravene the Municipal Finance Management Act and by rejecting a lawful, good-faith short-term arrangement, the landlord has adopted a coercive and obstructive stance.
“This conduct disregards the municipality’s statutory obligations, undermines the principle of co-operative engagement expected in dealings with an organ of state, and places private commercial interests above the public interest in ensuring uninterrupted municipal service delivery.”
The Herald
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