What is a Rates Clearance Certificate?Before a property can be transferred to a new owner, the
municipality must issue a
Rates Clearance Certificate (RCC).
This certificate confirms that
all municipal charges — such as rates, refuse removal, sewer, and water — have been paid
in full up to a future date. The Deeds Office will not allow the transfer to go through unless this certificate is issued.
Why the Municipality Requires Extra Payment:When applying for the certificate, the municipality doesn’t just ask for what’s
currently owed.
They usually
estimate and bill about 2–3 months in advance to make sure the account stays covered until
the property actually registers, even if the seller stops paying after signing the offer.
This means the seller needs to pay an amount
equal to roughly three months’ rates and taxes in advance when the conveyancers apply for the certificate.
Any unused portion of this amount is
refunded to the seller after registration.
Who pays for it and why:The seller is responsible for paying the amount required by the municipality before registration.
When the conveyancers apply for the certificate, the municipality usually requests
an advance payment equal to approximately three months’ rates and taxes.
This ensures that the account remains covered even if the seller stops paying after signing the offer to purchase.
Refunds after registration:After the property has been
transferred into the new owner’s name, the municipality will process a
refund for any unused portion of the advance payment.
This refund is
paid to the conveyancer, not directly to the seller.
In terms of the law, the conveyancer is entitled to
deduct an administrative fee for handling the refund and then pay the remaining balance to the seller.
Please note that the
municipality may take a considerable amount of time to process this refund.
It remains the
seller’s responsibility to follow up with the municipality regarding payment.
Once transfer is complete, the
transfer attorney will provide the seller with:
- A letter confirming registration, and
- A Deeds Office search proving that the property has been registered in the new owner’s name.
Only
after the property has been changed into the new owner’s name will the municipality issue the refund.
