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.