Meumann White News

"Our Latest News Flash – delays with rates clearance certificate"

Implementation of Local Government: Municipality Property Rates Act No. 6 of 2004 – RCR 65/2008 – Chief Registrars Circular 2/2006

Right registered against immovable property

Act 6 of 2004 became operational on 2 July 2009 and as a result a rates clearance certificate will have to be lodged in respect of a transfer of a "right registered against immovable property" as the definition of property in the above mentioned Act includes a right registered against immovable property

According to the definition of property, a right registered against immovable property is not limited and will include e.g. Real of Right of Exclusive Use Area, Real Right of Extensions (and portions thereof), servitudes, leases, pre-emptive rights, usufructs, habitatios, etc, but excludes a mortgage bond.  It would also include the cancellation of such Rights.

Please note that the rates clearance certificate is only required for the cession of a Real Right and not the creation of such right.

A blanket rates clearance certificate will be provided by the Municipalities for a limited period until they are in a position to provide rates certificates.

Some of the smaller Municipalities are providing hand written rates clearance certificates for exclusive use areas at present. eThekwini Municipality have advised that they are unable to provide hand written rates clearance certificates.

To date eThekwini Municipality have not lodged a blanket rates clearance certificate and matters are therefore being queried and rejected in the Deeds Office.  We have been advised by eThekwini Municipality that they intend to hold an Executive Committee meeting this week to ensure that a Council Resolution is passed to lodge a blanket certificate in the Deeds Office. We have impressed on them the urgency of this matter as it is delaying transfers where an exclusive use area is involved. We will keep you advised of progress with this issue.

2 other points brought up with the chief registrar's circular are:-

1. Sectional Titles

Please note that all Sectional title schemes must be lodged with a rates clearance certificate even if the municipality valuation roll is in incomplete.

1. Destruction of Sections and Extensions of Sections

Please note that a rates clearance certificate will be required to be lodged in the abovementioned cases.

Written by: BRUCE FORREST