Seller not liable for property rates

2017-07-19 06:02
Natalie Steenkamp

Natalie Steenkamp

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Question:

I am in the process of selling my house.

When I requested a property rates clearance certificate from my municipality, they asked me to pay the estimated rates until the end of their financial year, which would be months after my house has been transferred to the new owner.

Surely I cannot be held ransom for these future rates just because I need a rates clearance certificate?

Answer:

In short the answer according to a recent Supreme Court of Appeal case is “no,” you cannot be held liable for payment of the property rates for the entire financial year of the municipality when requesting a rates clearance certificate.

In the case of the Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd, the municipality required Amber Mountain Investments to pay rates from 1 July 2009 until the end of its financial year, which would be a few months after the date of the registration of the property transfer.

Amber Mountain Investments paid the amount of R2 281 014,68 under protest in order to obtain the rates clearance certificate needed for lodgement at the deeds office to register the transfer.

However, they were not happy with the fact that they were accountable for R1 066 532 more than was actually due and took the municipality to court.

The question the court had to consider was whether a property owner in the case of a sale of property is liable to pay rates calculated until the end of the financial year of the municipality or until date of registration of the property transfer.

The court held that the intention of the legislature was clear from Section 118 of the Municipal Systems Act that municipalities were only entitled to recover municipal debts due two years prior to the date of application for the clearance certificate, and that the municipality was not entitled to recover future municipal debts for periods which extended beyond this date, irrespective of whether the municipality had a policy in place which determined otherwise.

The court accordingly found in favour of Amber Mountain Investments.

So, if your municipality is asking you to pay rates estimated until after the date of application for the rates clearance certificate, you should ask your attorney to assist you to bring the outcome of this case to the municipality’s attention.

  • Natalie Steenkamp, associate, Phatshoane Henney Attorneys

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

Inside News24

 
Watch: Investing in the future through child development

An investment of R32-million into 11 early childhood development centres is changing the future for children in the Northern Cape.

Partner Content
What all investors should know about index investing

Index-linked investments are growing fast in popularity globally, and are growing in size and complexity too.

/News
 

Weird things dogs do

Caught your dog doing something... well a little bit odd? Don’t worry, there’s a simple explanation for his behaviour.

 
 

Paws

Makeover saves dog’s life
For the love of Corgis!
Can we communicate with our pets?
8 great natural remedies for your pet
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.