Why does the seller have to pay clearance figures before the transfer of fixed property?

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Before transferring any fixed property at a deeds office, a municipal clearance certificate has to be obtained and lodged. The certificate confirms that all amounts due to the municipality in respect of the property have been settled up to date and also an advance amount for a period of typically three months. The transferring attorneys will, therefore, always, as part of the registration process, obtain the municipal clearance figures and provide them to the seller for payment. After payment, the municipality will issue a clearance certificate.

The relevant legislation, namely section 118 of the Local Government: Municipal Systems Act, 2000, therefore, assists the municipalities with their debt collection. Also, with the advanced payment, the municipality can ensure that the account is fully paid by the transferor on the date of registration. All payments into the municipal account are credited to that account. The transferor might therefore have credit available on the account after the registration date.

Similar principles apply to a sectional title unit, where the body corporate would issue the clearance figures and the clearance certificate. Also, where the property is subject to the rules of a homeowners association, similar principles apply.

The aforesaid is relevant for any transfer of fixed property, including from a deceased estate.

Volker Krüger

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