Why rates and levy clearances are issued 4 months in advance.

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It’s not for naught that we need knowledgeable attorneys when we embark on the journey selling or buying a home. There is a plethora of laws that we need to keep track of and hoops we need to jump through to ensure that the transactions and conveyancing goes smoothly. Being able to entrust the conveyancing to an expert just makes things easier, but that does not mean that we don’t want to know what is happening and why – it is, after all, our home ad future that is on the line.

One document without which a property transference cannot be completed is a rates clearance certificate. If you are purchasing or selling a sectional title, you also need a levy clearance certificate. If you don’t have them, the transfer is dead in the water, but what are they and why are they issued four months in advance?

What are these documents?

The rates and levy clearance certificates are, essentially, documents proving that the current owner of the property does not owe any outstanding money on the property, either to the municipality or the Body Corporate.

  • The Rates Clerance Certificate

This certificate is specifically awarded by the municipality in which the property is located. Both a freehold and a sectional title property requires a rates clearance certificate. The conveyancer responsible for the transfer will request the Rates Clearance figures from the relevant local authority. These figures include outstanding debts from the previous two years on municipal taxes, electricity, water, sewerage, refuse, etc. Once these are issues, the conveyancer will request the outstanding amount be paid by the current owner and upon a proof of payment being made available, the Rates Clearance certificate should be issued. The figures should normally be available in 10-14 days and the certificate within 2-3 days once payment has been made. By law, this certificate is valid for the 60 days from the date of issue.

  • The Levy Clerance Certificate

A Levy Clearance is only required if the property being transferred is a sectional title. In this case, the conveyancing attorney requests the Levy Clerance figures from the Body Corporate. It indicates the amount that the current owner still needs to pay to the Body Corporate to settle the last debts. When this amount has been paid or payment arrangements made and the Body Corporate is satisfied, they can provide the Levy Clerance certificate that the conveyancer requires to submit the next documents to the Deeds Office.

Why are they issued 4 months in advance?

When the Rates Clerance figures are being calculated, the municipality usually works it out as the full amount from the last two years that are owed and then the monthly average extrapolated over the next 4 to 6 months.

This is done because property transfers can take some time to complete, and the municipalities need to ensure that they are paid what is due to them by the seller in the months that the transfer is being completed. The Levy Clerance certificate also falls into this time frame as both documents are required for the successful transfer of a Sectional Title. These figures are also calculated to the estimated date of the registration of the transfer – 4 to 6 months.

If you need an expert conveyancer to help you jump through all the legal hoops of transferring a property, don’t hesitate to get in touch with AED Attorneys. Our friendly staff makes it their mission to ensure your property transfer is handles with care and as quickly as possible.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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