A Clearance Certificate is that pesky document we all need when we have sold property. Without a Clearance Certificate the sale of a property can not be concluded.
What is a Clearance Certificate?
This is a receipt that proves your Rates and Taxes against your property is paid up in full. The municipalities are strict on Clearance Certificates because when a property becomes distressed or for some reason owners can no longer afford their bills, this is one of the first bills which go to the bottom of the stack.
The transferring attorneys request the Certificate from the municipality.
It takes up to 30 days for municipalities to issue Clearance Certificates. Johannesburg municipality says they process more or less 10 000 Clearance Certificates a month. A Clearance Certificate is valid for 120 days from date of issue.
Clearance Certificates have to accompany all the other documentation to the deeds office to have the deed successfully transfered. Without the Certificate the deeds office will not even look at a transfer.
In terms of the new Municipal Property Rates Act, implemented in July 2008, people who own sectional title property will now be required to supply the deeds office with a Clearance Certificate. In the past the body corporate was responsible for the rates and taxes of a sectional title development.
Municipal Clearance Units seem to be over worked as this is a general complaint amongst many estate agents at the moment. It seems there are many disputes raised to the department which are time consuming and frustrating to resolve. Transfers are delayed through disputes and problems which may arise in the course of Certificate payments.
It would be advisable to ensure your Rates and Taxes are up to date and any disputes regarding charges are up to date when you are in the process of selling your home.