People & News

Court action

Long delays in obtaining municipal clearance certificates for property transfers in Johannesburg have become a huge problem - which is impacting on the lives of thousands,” says Jan le Roux, chairman and founder of the Leapfrog Property Group.

The problem has become so exasperating that a law firm in Gauteng is seeking, and finding, solutions in the High Court.

“After waiting for a clearance certificate for 11 months, during which one of our attorneys personally visited the Johannesburg Council offices 40 times, we brought an urgent application to the South Gauteng High Court,” says Johan van Heerden, a senior partner of property sector-focused Dykes, van Heerden Inc.

“After an unsuccessful defence of the action, the Municipality – which was represented by an attorney and advocate – was ordered by the Court to provide the clearance certificate within 14 days…which it duly did,” says van Heerden.

This was one of four actions that Dykes, van Heerden has so far successfully brought against the Council recently to obtain long-outstanding clearance certificates.

“In one of  the other cases, in which we waited in vain for nine months, we received the clearance figures within just two days of the Court ruling in our favour!,” says van Heerden.

“If the Council defends the action, a legal process of this nature can cost between R40 000 and R50 000. The irony is that, if the order is granted with costs (which is what happened in our applications) it is the ratepayers that effectively foot the bill,” he adds.

The transfer of ownership of a property cannot be done unless the owner has a clearance certificate confirming that all municipal accounts (including water, electricity, refuse removal and sewerage services) have been settled.

Just how big is the problem?

Recent media reports put the clearance certificate backlog in the Johannesburg municipal area at about 45 000.

 “The enormous knock-on effects of a backlog of this magnitude are far-reaching,” says le Roux.

“Sellers suffer interest losses; conveyancers waste valuable time and money in following up what should have been a mere formality; and buyers can’t take transfer and become owners.

“Furthermore, the impact on the cash flow of estate agents in the Johannesburg area is severe. Where clearance certificates are slow in coming, many agents are now waiting way beyond the normal timeframe (three months) before their commissions are paid,” says le Roux.

“One can only hope that the authorities take note of, and rectify, this clearly avoidable situation,” he concludes.

Reader Comments:

Lizelle 30/06/2011:

This problem is not just in Johannesburg, but all over the country. It is always a delay in obtaining clearance figures and clearance certificates.

Ria Pretorius 01/07/2011:

The must employ people who are able to do the work!

Jan van Tonder - MBAT Attorneys 01/07/2011:

We have also launched simular applications to court with success. Unfortunately, as stated, the rates payers foot the bill. Be that as it may, maybe more apllications should be launched forcing the municipalities' hand in resolving the problem (hopefully).

Stian Dreyer 01/07/2011:

I don't even want to mention the aspect of Section 118 of the Local Government Municipal Systems Act as interpreted by the Appeal Court in the matter of City of Cape Town v Real People Housing (PTY) Ltd 2005(5) SA 196(SCA), where it was confirmed that the figures in relation to arrears may not exceed 2 years. Try and get the Municipality to follow the law if it is not in their favour.

Bernard van Tonder 11/07/2011:

The George, Knysna, Mossel Bay and other local Municipalities in the Southern Cape have been doing excellent work, although any transaction here that is linked to a sale in Gauteng is inevitably regretfully delayed extensively.

Bernie 05/09/2011:

We have a transfer that is for a prominent public figure that is delayed for 18 months now! Would that it could be possible to pay for such delays out of Council staff Bonus payments instead of Rate Payers pockets!!??

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