Rates Clearance Certificates

According to conveyancers and property Law attorneys at Abrahams & Gross, the RCC issued by the city council certifies that there are no outstanding funds due to the municipality at the time of the registration of transfer to the purchaser. This certificate is required under the Municipal Systems Act and must be lodged in the Deeds Office for registration. The Registrar of Deeds will not register the transfer of a property unless the conveyancer lodges a valid RCC along with other required documents at the Deeds Office.

Rates Clearance Figures

The conveyancer will make application to the city council for the issuing of rates clearance figures. Rates clearance figures are comprised of all arrears amounts for rates, taxes, electricity, water, sewerage, and refuse, as well as an advance payment covering a period of 60 days being the period of validity of the rates clearance certificate (municipality may require up to 120 days).

Whose responsibility is it to obtain a rates clearance certificate?

It is the seller’s responsibility to settle amounts due in order to obtain the RCC. Upon request, the seller must pay the conveyancer and not the city council directly. The conveyancer will then pay the city council to ensure that the payment is linked to the application number in respect of the transfer as well as for the purposes of expedition of the issuing of the rates clearance certificate.

Once the conveyancer has paid for and obtained the RCC, the seller’s account at the city council will be in credit and the seller will no longer be required make any further monthly payments to the city council prior to transfer.

Once registration of transfer has been completed, the conveyancer submits a refund form to the city council in respect of any credit that maybe be due to the seller. This usually occurs when the registration of transfer takes place prior to the expiration of the 60-day period. The city council can take approximately four to seven months to reconcile the seller’s and purchaser’s accounts and pay the refund.

The rates clearance certificate, or RCC, is not a formality. Without it, the Deeds Office cannot register the transfer. Full stop.

Municipal clearance delays are one of the most frustrating realities of property transfers in South Africa today, and understanding what is happening and what can be done about it is part of my job as the agent on a deal.

What the Law says 

Section 118 of the Local Government: Municipal Systems Act 32 of 2000 is unambiguous. A Registrar of Deeds may not register the transfer of a property without a rates clearance certificate confirming that all amounts due to the municipality over the preceding two years have been paid. The certificate, once issued, is valid for 60 days from the date of issue.

The law also places a limit on what municipalities can demand. The Supreme Court of Appeal confirmed in the City of Tshwane v Mathabathe case that a municipality must issue the clearance certificate once the two-year debt has been settled. Municipalities cannot withhold a clearance certificate to collect historic debt that falls outside the two-year window. That older debt remains a personal obligation of the seller, not a transfer block.

Why delays are so common 

In practice, the process should take between 5 and 15 working days. The municipality issues rates clearance figures to the conveyancer, the seller settles the outstanding amount including a projected advance of 3 to 4 months, and the certificate is issued once payment is confirmed. In stable, well-resourced municipalities, this works reasonably smoothly.

The reality in many South African municipalities is different. Understaffing, paper-based record systems, outdated property databases, internal sign-off procedures involving multiple departments, and general administrative backlogs mean that turnaround times in some municipalities have stretched to 30, 60, or even 90 days. Some conveyancers have reported waiting several months in certain jurisdictions. Where the rates clearance certificate eventually expires during a prolonged process, the figures have to be recalculated and a fresh payment made before the certificate is reissued.

When the buyer is carrying the costs 

If the delay is extending beyond what either party reasonably anticipated, there are mechanisms available. Bridging finance providers in South Africa offer short-term finance against the proceeds of a confirmed property sale, which can assist a seller who is carrying bond repayments, rates, and other holding costs while they wait for the transfer to finalise. This does not resolve the delay, but it eases the financial pressure that can cause a seller to panic and pull out of a deal.

"Where the 60-day validity period of the clearance certificate expires before lodgement occurs, the conveyancer will need to request fresh clearance figures, and the seller will need to make an additional top-up payment. This is an added cost that most sellers do not anticipate, and I make sure they understand the risk early in the process," he says. 

Prevention is better than cure

Prinsloo says the best way to manage municipal clearance delays is to start the process as early as possible. I advise sellers to ensure their municipal account is fully up to date before a property is listed, not after an offer is accepted. An account that has been properly maintained, with no billing disputes or arrears, moves through the clearance process far more smoothly than one where problems only surface once the application has been made.

This article is based on information provided by the Conveyancing and Property Law team at Abrahams & Gross. While care has been taken to ensure accuracy, the content is provided for general information purposes only and should not be regarded as legal advice. Always consult a qualified attorney for guidance on your specific circumstances.