N4. Rates Clearance

A rates clearance certificate is a certificate that is issued by the relevant local municipality on application by a conveyancer for the transfer of a property.

The purpose of this document is to prove that all the outstanding debt on the property has been paid by the seller.

It is the duty of the transferring attorney to apply to the local authority or council for a rates clearance certificate.

For the council to issue this certificate, they will require all rates and taxes on the property to be paid up to date. Additionally, they will require at least 4 to 5 months of rates and taxes to be paid in advance. Only once these payments have been made, will the council issue the conveyancing attorney with the rates clearance certificate.

The Registrar of Deeds will reject the transfer of the property without a valid rates clearance certificate which will prolong the change of ownership process. Once the registration has been finalized, the seller is then entitled to a refund of the amount paid in advance.

Although the conveyancing attorney will notify the council of the registration, it’s not the attorney’s responsibility to obtain the refund. It’s the responsibility of the seller. This refund may take several months to obtain.

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