The content on this page is not written by Rates Watch, but is supplied by third parties. This content does not constitute news reporting by Rates Watch. Article written by Dr Samantha Smith of The Big Small firm.
In the conveyancing context, obtaining and lodging a rates clearance certificate is central to a successful property transfer.
Under South African law, the transfer of immovable property cannot be formally registered in the Deeds Registry without a valid rates clearance certificate (‘RCC’). According to section 118 of the Municipal Systems Act, an RCC is a legal document issued by a local authority, which confirms that all municipal service fees, property rates, and other charges incurred during the 24 months prior to application have been fully paid.
To obtain an RCC, the seller’s conveyancer must apply to the relevant municipality for the issuing of rates clearance figures. The municipality will provide a breakdown of the amounts to be paid for a period of 90 to 120 days in advance to prevent any outstanding payments on transfer.
The conveyancer collects the money from the seller to pay the municipality, which will then credit the seller’s account. Notably, the seller may discontinue paying monthly rates for the period included in the assessment.
Once payment has been received and the municipality has verified all supporting documentation, it will issue an RCC, which is valid for 60 days, and must be lodged with the transfer documents in the relevant Deeds Registry.
Following the registration of transfer, the Deeds Registry will update its records to reflect the change of ownership. Once this is finalised, it will notify the relevant municipality, which will update its own records and open a new account in the name of the purchaser. From the date of registration, any amounts due are backdated and incorrect charges levied against the seller’s account – in respect of the sold property – are reversed.
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