The short answer
Yes, the process of transferring the property to the buyer can only happen once the rates have been paid.
The whole question
Can the conveyancer insist on paying the rates in advance and deducting it from the money the sellers will get from the sale of the house, while the sellers would prefer to wait for the next salary to pay the rates?
The long answer
You may know that the seller must pay the conveyancer and not the city council or municipality directly, as the municipality requires the rates to be paid with a trust cheque.
Velile Tinto Cape Inc says in an August 2020 article that “if the seller pays the municipality directly into the municipal account, this will result in a 21-day processing delay at the municipality, which will then delay the transfer process.”
According to section 118 (1A) of the Municipal Systems Act 2000, “the clearance certificate is valid for a period of 60 days from the date it was issued” (in other words, the date that the rates assessment calculation is printed). That means that if the transfer of the house is not registered within the 60-day period, a revised rates assessment and clearance certificate will have to be issued.
Only when the conveyancer has paid all the rates and taxes owing (electricity, water, sewerage and refuse) plus an advance amount for some two months or so, will the conveyancer be able to obtain the Rates Clearance Certificate (RCC) from the municipality. And only when the RRC is submitted to the Deeds Office can the process of transferring the property to the buyer begin.
An article by Schindlers Attorneys says: "Without the rates clearance certificate, no transfer of an immovable property can happen. This is, accordingly, an integral part of the conveyancing process and if it does not happen quickly enough, it can cause a sale to fall through or other damages to be suffered by either the seller or the buyer."
Private Property says the following: “One of the transferring attorney’s key roles is to co-ordinate and control all the role players involved in a transfer, including SARS (transfer duty), the municipality (Rates Clearance Certificate) and the bank. In order to do this as seamlessly as possible, it is essential that both the buyer and seller submit all the necessary documentation in time, as per the legal requirements and without omissions.”
Selling a house is a complex business involving a number of processes and players, and it can get stuck at any point along the way, which will cause stress, frustration and extra expense. For that reason, Velile Tinto Cape recommends that sellers follow the transferring attorneys' instructions regarding rates clearance payments.
I don’t think that you can be forced to do anything, but it would seem that it is generally advisable to listen to the advice of your conveyancer.
Wishing you the best,
Answered on Dec. 7, 2022, 12:09 p.m.
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