Conveyancing attorneys in Johannesburg have warned that a new ruling from the Chief Rregistrar requiring upfront payment of 120 days of rates and service by property sellers will throw transactions into further chaos because of existing billing problems. According to Independent Online, their main concern is that the sellers are being forced to pay in advance to get the clearance certificates. And then they have difficulty in getting refunds once the transfer has been completed because the city simply does not give refunds, or, when it does, it takes months, even years, to do so.
They claim it is going to cause major difficulties for property developers who will have to pay in hundreds of thousands of rands upfront. Another problem is that if purchasers refund sellers for the advances, they could experience problems getting their money back from the sellers, if the seller has moved on or has left the country. The purchaser will then have to pay out again. The new ruling comes from the Chief Registrar in terms of the Local Government Municipal Systems Act.
Article on Independent Online
Billings chaos
Reader Comments:
For 16 years I have apportioned the rates and taxes between the purchaser and seller on registration of a transfer. My understanding has always been that the Local Authority does not apportion rates and taxes but only water and electricity. I have always charged the seller for all the charges for water and electricity. Surely this has not changed. The council will only start billing the purchaser for rates from the month after which the rates clearance was issued. Please can someone clarify this as it is causing huge concern amongst purchasers and sellers with this new ruling given the amounts we are being required to pay to the council
I feel that this ruling is going to be very difficult for the attorneys as well as the purchaser and seller. They do not have the necessary funds in most of the cases to pay the rates and taxes/levy in advance for 120 days.
This is going to cause various problems and the property market and attorneys are going to experience that the transfer rate will go down with great effect.
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