Many people are under the misguided impression that, when a property is transferred from one person to another, the Municipality will automatically close the seller’s existing account and open a new municipal account for the new owner of the property.  This is not the case.

On registration of transfer, the attorneys who attended to the transfer will provide the seller and purchaser with documentation that is to be taken to the Municipality.  This documentation includes:

• confirmation of registration;
• a Deeds Office search to confirm that the property has been transferred to the new owner;
• a copy of the rates clearance figure which was issued by the Municipality;
• proof of payment of the rates clearance amount; and
• a copy of the rates clearance certificate which was lodged in the Deeds Office.

This documentation can either be taken in person by the seller and purchaser or the parties can make use of a consultant who will attend to this on their behalf for a fee. 

Upon receipt of the abovementioned documents, as well as confirmation from the Deeds Office that the matter has been registered, the Municipality will update their records, close the seller’s existing account and open a new account for the purchaser.  They will then attend to a journal on their system, back-dated to the date of registration.  The seller will then be entitled to a refund for any amount which has been overpaid to the Municipality for the rates clearance.  The purchaser will receive a statement from the Municipality from the date of registration onwards, setting out the amount that is due by them to the Municipality. Purchasers would be well advised to make provision for their backdated rates liability that will be due.

The letter addressed to the Municipality confirming registration contains the transferring attorney’s bank details and a request that the seller’s refund be paid to the transferring attorneys’ trust account. Experience has taught us that the refunds that are processed and paid to the attorney’s trust account are processed quicker than if paid to the seller directly.  The reason for this is that the attorney’s banking details are already verified on the Municipality’s system and therefore the payments can be effected as soon as the refunds are available.  If the funds are paid to the seller directly, the Municipality first has to verify the seller’s banking details which delays the refund process.  As soon as the transferring attorney receives the refund, it can be paid to the seller directly.  

It is imperative that both the seller and purchaser ensure that the documentation is delivered to the Municipality to note the change of ownership. If the one party does not attend to this, the Council will not assist the other party. 

Furthermore, parties must be aware of the fact that this process can take time.  However, it is necessary to follow up with Council on a regular basis, after documentation has been submitted, to ensure that Council is attending to the matter.