I have a question to ask of other conveyancers who practice in different parts of the country and will pose my question at the end once I have set the scene.
Before a transfer may be registered in any Deeds Registry in South Africa a Conveyancer has to present a clearance certificate issued in terms of Section 118 (3) of the Municipal Systems Act No 32 of 2000 to the Deeds Office. Before such a certificate is issued all municipalities require payment of, not only current and arrear rates (up to 2 years back), but they also require advance rates and service charges to be paid. Some require the advance payment to be for a fixed period while others require payment to be made for the balance of the current rating year.
I have, until recently been under the impression that there is a uniform practice in terms of which all municipalities will, after the transfer is registered, refund to the seller the balance of the advance rates and service charges paid beyond the day prior to the date of transfer and then charge rates and services to the new owner on a new account from date of transfer. This makes logical sense as the seller is only liable for rates while he is the owner and the new owner is liable from the date of transfer. The seller only consumes services (usually) until the date of transfer and the Purchaser thereafter. I have also been under the impression that at least part of the purpose of the national legislation on the matter of rates clearances and recovery of rates and service charges was to introduce uniformity throughout the country in the interests of certainty.
Liability for rates is imposed on the owner of a property in terms of section 24(1) of the Local Government Property Rates Act of 2004. Similarly services are provided in terms of Chapter 8 of the Local Government Municipal Systems Act and the recovery of such charges is dealt with in Chapter 9 of that act.
I recently discovered that the Ndlambe Municipality in the Eastern Cape regards it as being the Conveyancers responsibility to make the pro rata adjustment between the purchaser and the seller. It occurs to me that here may be other municipalities that follow the same practice.
As rates are fixed for each rating year there is little difficulty about making adjustments between purchaser and seller. As certain municipal services are metered in order to be charged out the adjustment of such future metered services between purchaser and seller by a conveyancer is little more than guesswork. When a municipality makes the adjustment relating to metered services it is (or should be) based on actual consumption. The figures provided to the conveyancer for the purpose of a rates clearance can only be estimates in so far as they relate to future metered services. If the property is vacant for, say, six months after transfer and no metered services are used by the new owner it is impossible for the conveyancer to make a proper adjustment between purchaser and seller but a refund made by the municipality will be for more accurate and services, as metered, will be charged to the new owner on his new account from date of transfer. I am of course aware that there is often a considerable delay before the municipality is provided with details of the fact of a transfer being registered.
My question therefore is this: Is there any justification for any municipality insisting that it is the responsibility of the conveyancer to adjust rates and service charges, including metered service charges, between purchaser and seller?