Clearance Certificates and the Constitution

This section enables municipalities to make buyers and sellers of properties pay the service debts of their tenants before they would allow the property to be transferred to a new buyer. According to a report in the Financial Mail, the court in Mkontwana v Nelson Mandela Metropolitan Municipality and others (1238/02); Bisset and others v Buffalo City Municipality and others (903/2002) found that this section violated section 25(1) of the Constitution which reads as follows:
"No one may be deprived of property except in terms of a law of general application, and no law may permit arbitrary deprivation". Section 118(1) was found to be arbitrary because municipalities can use other laws to collect debts.

In a reaction to this ruling a spokesman for eThekwini Municipality, Louis Kruger said that the finding would not result in a change of policy for the Durban area yet. Since the finding will have to be reviewed by the Constitutional Court. If ratified, property owners and banks will be saved millions of rands.


Full report in the Financial Mail: Subscribers only

Article in the Mercury