Why a Municipal Clearance Certificate?

 

“You cannot escape the responsibility of tomorrow by evading it today.” – Albert Einstein

Why does a transferring attorney have to obtain municipal clearance figures and a municipal clearance certificate from the municipality, in order to transfer a property onto a new Purchasers name?

There are certain documents that a transferring attorney is required to lodge at the Deeds Office in order to affect registration of a property. These Transfer Documents include:

  • the new Title Deed;
  • the Power of Attorney to register the property;
  • the old Title Deed;
  • the Municipal Clearance Certificate;
  • SARS transfer duty receipt; and
  • the Body Corporate and Home Owners Association Clearance Certificate (if applicable).

The municipal clearance certificate serves as proof that the Sellers municipal account is paid up in advance. The municipal clearance figures include all rates and taxes and charges for utilities in arrears, as well as an estimate future amount of rates and taxes for the following four months.

The Seller of a property must provide the transferring attorney with copies of his/her municipal account to expedite the application process. The municipal clearance figures are valid for a period of 30 days and must be paid before this time lapses.

The Seller is responsible for the payment of the clearance figures, as well as the costs for obtaining the certificate. Once the transferring attorney receives payment form the Seller, the Seller may immediately stop any and all payments to the municipality.

The Seller must expressly request a refund, if any, from the municipality. The municipality can take anything from a few months to two years to pay the refund to the Seller.

After the registration of the property the Purchaser is responsible to request a name change on the municipal account.