Backlogs causing trouble

For property sales in the City of Cape Town, the account for municipal property rates and services is transferred into the name of the buyer as soon as the City is advised that registration of transfer of ownership has taken place. In pre-COVID times this used to happen quite soon after transfer, and before the seller’s advance payment to obtain their rates clearance certificate had been used up. The City does however only transfer the account from the seller to the buyer when it is told of the transfer of ownership by the Deeds Office. They will not accept this information from another source.

As we all know, the Deeds Office has fallen behind in their work as a result of the COVID-19 pandemic, and information confirming transfer of ownership is not going through to the City. This has resulted in sellers still being billed for municipal property rates and services, even though their transfers have been registered months ago.

Many sellers affected by this have been calling us to complain. Some have continued to pay the account. This is our advice:

  1. The City will not transfer the account on the strength of our notification, so we cannot assist to speed this up.
  2. The seller just has to bide their time and wait for the information to reach the City from the Deeds Office, at which stage the account will be transferred into the name of the buyer.
  3. The seller is not obliged to pay the bill, and it is highly unlikely that the City will do anything about it, as the City is aware that the property is in the process of being transferred, and of the delays in the Deeds Office.
  4. If the seller has paid the bill after transfer, this payment will be refunded to the seller by the City when the account is transferred to the buyer’s name.
  5. The buyer should not pay the bill, as this payment would then be refunded to the seller, and the buyer will be asked to pay a second time when they receive the first bill from the City.
  6. The buyer beware! The first bill from the City will be a big one, for the period from the date of the transfer of ownership, up to the date of the first account, so start saving.

This is just another example of how the pandemic and the lockdown has caused us all additional stress. Luckily the remedy here is to do nothing. Just wait…

Miltons Matsemela Inc.

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