What is a rates clearance certificate?

South Africa's #1 independent property portal

When selling your property, the conveyancer will obtain a rates clearance certificate (RCC) from the local municipality before transfer of the property can take place. This document certifies that there are no outstanding rates due on the property on the seller’s account.

Why is a rates clearance certificate necessary?

The RCC certifies that the seller does not owe any money to the municipality for the two year period before the date of application for the RCC. The Deeds office in turn will not transfer a property from the seller to the buyer unless the conveyancer presents a legitimate RCC when lodging the documents.

It is necessary to obtain a rates clearance certificate for freehold property and sectional title property.

Payment of outstanding rates

After the conveyancer requested the rates clearance figures from the relevant City Council, sellers will pay any arrears including rates, taxes, electricity, water, sewerage and refuse. Also included is an advance portion.

This advance payment is law and is calculated after The City Council issues figures for rates and taxes, electricity, water, sewerage and refuse. This advance payment is for a period of 60 days. The City Council gives the seller 1-2 months to pay and thereafter the RCC is valid for the 60 day period. Should the amount not be paid in time and the figures expire, new figures will need to be requested.

It is important to note that the seller will be responsible for all accounts opened in respect of the property sold, even if accounts were opened by tenants.

Whose responsibility is it to obtain a rates clearance certificate?

It is the seller’s responsibility to settle amounts due in order to obtain the RCC. The seller must pay the conveyancer (and not the City Council directly). The conveyancer will then pay the City Council as they require rates figures to be paid with a trust cheque. The RCC must be obtained and paid for before the lodging of transfer documents in the Deeds Office.

Sellers should let the conveyancer have copies of all municipal accounts to expedite the application process.

When does the seller get a refund from the city council and how?

After the property has been registered and the municipal charges have been transferred to the buyer's account, there is usually an amount in credit due to the seller. The Council takes approximately 6 to 9 months to reconcile the seller’s and purchaser’s accounts and pay the refund.

As the seller, you should expressly request a refund from the municipality, as this does not happen automatically. You will have to complete a refund application wherein your banking or postal details are specified and this is usually signed with the transferring attorneys.

The Council will thereafter provide you with payment of the refund directly in due course.

Legal Property News
Collect rent in cash? Make sure you stay compliant with money laundering rules
24 Jan 2023
According to an International Monetary Fund assessment, “the widespread use of cash in South Africa poses a high risk for money laundering and terrorist financing”. With that in mind, the Financial Action Task Force (FATF) issued a report in October 2021 requiring substantial legislative changes by November 2022 in order for South Africa to avoid being greylisted by the international watchdog.
read more
Client funds intercepted? Law firms and estate agencies beware, as there is now nowhere to hide
17 Jan 2023
The 16 January 2023 Gauteng High Court decision, Hawarden v Edward Nathan Sonnenbergs Inc (attorneys), spotlights the severe liability risks attached to all the role players in the property cycle: from estate agencies to law firms in as far as the electronic sharing of banking details and other information is concerned.
read more
A guide to handling evictions
29 Nov 2022
Evicting a tenant is never an easy process. Following correct procedures and seeking out the advice of a rental expert can minimise the stress and streamline the process.
read more
If there’s no body corporate yet, who’s running your ST scheme?
18 Nov 2022
Buyers in new sectional title developments need to know at what stage they will start sharing responsibility with the developer for the security, maintenance, and insurance of the scheme.
read more
Real Estate Tools
Property Law
Contact our partner attorneys with your conveyancing and property law questions
Get pre-qualified
Make offers with confidence knowing what you can afford. Then shop for the best home loan
Bond Calculator
Calculate the estimated repayments on a home loan and savings with extra payments