Urban councils have been ordered by Government to immediately stop selling unserviced land to individuals, cooperatives and land developers for housing development as this contravenes the Urban Councils Act.
An audit into council accounts linked to land sales — the estate accounts — has also been opened.
It is feared that the irregular parcelling out of unserviced land by local authorities was fuelling corruption and abuse of estates accounts.
Councils are required by law to establish dedicated accounts where proceeds from land sales are deposited.
Local Government and Public Works Minister July Moyo told The Sunday Mail that a preliminary examination of books of most urban councils has shown that proceeds from land sales were being abused.
“Another area which we are worried about is that a lot of councils have gone into land allocations,” said Minister Moyo.
“The law is very clear: if you are an urban council, land should be serviced properly before it is sold.
“At the same time, Section 300 of the Urban Councils Act says when you are selling land you must establish an estate account.
“That estate account is very crucial because it is this account which you then use to create and service more housing stands so that those who are looking for residential and commercial stands will only buy serviced stands.
“We have seen that they have been abused.”
Although councils are allowed to borrow money from these accounts, the funds are supposed to be returned.
The Urban Councils Act stipulates that revenue from estate accounts should be used exclusively for the development of roads, sewer, drains and matters incidental thereto in respect of the development of stands for sale.
The money can also be used to fund legal, advertising and survey costs involved in the development of stands.
Minister Moyo said urban local authorities have been directed to use 10 percent of their devolution funds to compile property registers in order to ascertain their market value for purposes of charging accurate rates.
The General Valuation Rolls (GVR) determine how councils charge rates, with properties in well-established and sought-after neighbourhoods being valued higher than those in less affluent areas, due to factors such as location, service provision and crime rates.
Most local authorities have gone for more than 10 years without producing valuation rolls, a development that has resulted in declining revenue collection.
The need to undertake GVR every decade is outlined in the Urban Councils Act (Chapter 29:15) Section 247.
However, only Mutare has an up-to-date GVR.