Sectional title: July rates date

2009-03-04 00:00

July 1 is D-day for all sectional title units to be independently rated by the local municipalities.

That is when the Municipal Property Rates Act No. 6 of 2004 will become operative.

From that date, rates are no longer the responsibility of the body corporate; instead each owner in a complex needs to pay rates directly to the municipality.

Sifiso Msomi of Shepstone & Wylie’s property department warns owners that local authorities are now much more likely to take action against defaulting ratepayers because they now have the names and addresses of all sectional title owners.

“Failure to pay rates can result in the forced sale of your property by the municipality to recover the monies owed,” Msomi said.

“Municipal charges take preference over bonds and banks need to be aware that units that are in rates arrears could be sold out from under them.”

Msomi advised title-holders, when selling a unit, to include a clause that gives the date from which the buyer will be liable for levies and rates.

He said the valuation is based on the amount a property would realise if sold on the date of valuation in the open market by a willing seller to a willing buyer. For a sectional title property, the valuer must determine the value of each unit in the scheme.

By definition, a sectional title unit is a section together with its undivided share in the common property.

Common property does not have a separate value, its value being inherent in the value of each unit.

Conveyancers have to lodge a rates clearance certificate as proof that rates have been paid and mention must be made on a conveyancer’s certificate that provision has been made for the rating of the unit.

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