The City of Cape Town will start a special process to reduce arrears by about R150 million to the previously disadvantaged. This will result in people living free from debt fears.

To be eligible for a discount on debt, people staying in the Council's rental houses from July 1997 to June 2002 should go to their housing office as soon as possible to make the required arrangements. For every Rand they pay, the Council will contribute a Rand to reduce their historic debt.

This is part of the City's drive to bring equity to rental charges across the City, including people who did not qualify for earlier reductions and to encourage people to pay for what they use.

If all the debtors take up the offer, the Council will recover more than R60 million of arrears. The money will be spend on, amongst others, upgrading or better maintenance of Council houses and flats.

The largest part of the package (R90 million) is certain unrecoverable debt of before 30 June 1997 which will be written off or substantially reduced for current tenants according to the policy of Council.

Separate arrangements must be made to pay all debt beyond 1 July 2002.

Further to this rare option, the City will finance the sale of rental houses if occupants wish to become owners, despite their rental arrears. A loan agreement should be entered into for this purpose at the housing office. When the last payment is received, the house shall be transferred into their names.

Ms. Gawa Samuels, Member of the Mayoral Committee for Housing, says: "This will mostly benefit the vulnerable, like woman led households, who are generally denied bank loans. It is the bargain of a lifetime that could not be repeated again! It is in their own interest that people come forward as soon as possible to make arrangements to pay."

Alderman Maatje Malan, Member of the Mayoral Committee for Finance, says: "This intervention was necessary to redress the imbalances of the past where the debt of black authorities alone were written off, and to allow for renters to become owners. To get this fantastic relief benefit, the occupants must make arrangements and pay their debt. When they pay, the City will meet them half way and reduce their debt by the same amount." 

"All the affected people should make use of this great opportunity in their lives.  If they do not, Council will continue to recover all outstanding money in line with its Debt Management Policy.  It is now the time to pay promptly in order for the City to get money, that in turn, can be used to deliver services to more citizens."