How to Get a Municipal Rates Clearance Certificate

How to Get a Municipal Rates Clearance Certificate in South Africa

If you're selling property in South Africa, there's one document that can hold up the entire transaction more than almost anything else: the rates clearance certificate. Without it, the Deeds Office simply cannot register the transfer into the buyer's name — no matter how ready everyone else is to sign. Here's what it is, who needs to get it, and how the process actually works.

What Is a Rates Clearance Certificate?

A rates clearance certificate (often abbreviated RCC) is an official document issued by a municipality confirming that all municipal charges connected to a specific property — property rates, service fees (water, electricity, sanitation, refuse), surcharges, and other municipal levies — have been paid in full for a defined period.

It exists because of Section 118(1) of the Local Government: Municipal Systems Act 32 of 2000, which states that a Registrar of Deeds may not register the transfer of a property except on production of a certificate issued by the municipality where the property is situated, certifying that all municipal service fees, rates, and related charges due in connection with that property over the two years preceding the application have been paid in full.

In plain terms: without a valid rates clearance certificate, the property transfer legally cannot be registered. It's a hard stop built directly into the deeds registration process, not just a formality.

Who Applies, and Who Pays

In practice, the seller's conveyancer (transferring attorney) handles the application, not the seller directly. The attorney submits the request to the relevant municipality on the seller's behalf as part of managing the property transfer.

The seller is generally responsible for settling the outstanding amounts the municipality calculates, since Section 118(1) specifically covers debts incurred by the current/previous owner during the two years before the application — this is what needs to be cleared before the certificate can be issued.

What the Conveyancer Needs to Apply

To request rates clearance figures from the municipality, a conveyancer will typically need:

• A completed rates clearance application form (specific to that municipality)
• A copy of the signed deed of sale
• A power of attorney from the seller, authorising the attorney to act on their behalf
• FICA documentation for both the seller and the purchaser
• A copy of the most recent municipal account(s) for the property
• A copy of the Deeds Office property printout, particularly important for sectional title units
• For deceased estates, a copy of the Letter of Executorship and the Liquidation and Distribution (L&D) account

Step-by-Step: How the Process Works

Step 1: The Conveyancer Requests Clearance Figures

Once instructed to handle the transfer, the conveyancer applies to the relevant municipality for the property's "clearance figures" — a breakdown of everything currently owed on the municipal account tied to the property.

Step 2: The Municipality Calculates the Amount Due

The municipality works out the outstanding balance based on the account history. Under Section 118(1), only amounts that became due within the two years preceding the date of the clearance application are relevant to the certificate itself — though, as covered below, older debt can still create complications even after the certificate is issued.

Step 3: The Seller Settles the Amount

The conveyancer relays the required payment to the seller (typically to be paid from the sale proceeds, or directly by the seller if settlement happens before proceeds are available). This can include a top-up for rates and services expected to accrue between the application date and the anticipated registration date, since municipalities often build in a buffer to avoid issuing a certificate that's immediately out of date.

Step 4: The Municipality Issues the Certificate

Once the required amount is paid, the municipality issues the rates clearance certificate. Importantly, the Constitutional Court has confirmed that a municipality cannot lawfully refuse to issue a certificate once the amounts properly due under Section 118(1) — the two-year figure — have been paid, even if the municipality believes older, historical debt is still outstanding.

Step 5: The Certificate Is Lodged With the Deeds Office

The transferring attorney submits the rates clearance certificate along with the other required documents to the Deeds Office as part of the registration process. Only once this certificate is on file can the Registrar of Deeds proceed with registering the transfer.

Step 6: The Municipality Closes and Reconciles the Account

After registration, the municipality closes the seller's account as of the registration date. If money remains in the account after final reconciliation, the transferring attorney is generally responsible for requesting a refund into their trust account, which is handled as a separate process from the clearance certificate itself.

Certificate Validity

A rates clearance certificate is generally only valid for 60 days from its date of issue. If the property transfer isn't registered within that window — which does happen, particularly with delays in bond registration or Deeds Office backlogs — the certificate can lapse, and a fresh clearance figure calculation (and potentially further payment) may be required before registration can proceed.

The "Historical Debt" Complication: What the Constitutional Court Decided

This is where rates clearance certificates get more complicated than they first appear, and it's worth understanding if you're buying or selling.

Section 118(3) of the Act separately provides that any amount owed for municipal service fees and rates constitutes a "charge upon the property," enjoying preference even over a registered mortgage bond. For years, some municipalities interpreted this to mean that historical debt older than the two-year Section 118(1) window — debt incurred by a previous owner, sometimes years earlier — could still be recovered from a new owner after transfer, or even used as grounds to refuse services to a new owner.

In the landmark case Jordaan and Others v City of Tshwane Metropolitan Municipality and Others (2017), the Constitutional Court settled this. The Court confirmed that once a certificate is properly issued under Section 118(1) — meaning the two-year debt has been paid — that historical municipal debt does not survive transfer to a new owner. A municipality can still pursue the previous owner (the seller) for that older debt, and it can take urgent legal steps like interdicting a pending transfer to protect its position before registration happens — but once transfer is registered, a new owner cannot be held liable for a predecessor's historical debt, and a municipality cannot lawfully refuse services to a new, paid-up owner over debt incurred by someone else.

This matters most for buyers: if you're purchasing a property with a long history of prior owners, it's worth confirming with your conveyancer that the clearance process has been properly followed, since it's specifically designed to protect you from inheriting debt you had nothing to do with.

Common Delays and Pitfalls

• Municipal account errors or unbilled charges — some municipalities have a backlog in updating accounts, which can produce disputed or inflated clearance figures. Property owners and conveyancers sometimes need to formally query figures that don't reconcile with actual payment history.
• Sectional title complications — for a unit in a sectional title scheme, the Body Corporate's own levies also need to be up to date, and all owners in the scheme share liability for Body Corporate debt collectively, which is a separate process from the municipal rates clearance certificate itself.
• Certificate lapsing before registration — given the 60-day validity window, transfers that stall for other reasons (bond delays, FICA issues, estate administration) can force a costly re-application.
• Underestimated top-up amounts — if a municipality's estimate for charges between application and registration is too low, and actual usage runs higher, this can create a shortfall that needs resolving before the account is finally closed.

FAQ

What is a rates clearance certificate? An official municipal document confirming that all property rates, service fees, and related municipal charges connected to a specific property have been paid in full, as required for property transfer under Section 118(1) of the Municipal Systems Act.

Why do I need one to sell my property? Because the law requires it. The Registrar of Deeds cannot register a property transfer without a valid rates clearance certificate — there's no way around this requirement for a standard sale.

Who applies for the certificate — me or my attorney? Your conveyancer (transferring attorney) applies to the municipality on your behalf as part of managing the sale. You don't need to apply for it yourself, though you'll need to pay whatever outstanding amount the municipality calculates.

How much do I have to pay to get the certificate? The municipality calculates the amount owed on the property's account for the two years preceding your application, plus often a buffer for anticipated charges up to the expected registration date. Your conveyancer will confirm the exact figure with the municipality.

How long does a rates clearance certificate stay valid? Generally 60 days from the date it's issued. If registration doesn't happen within that window, the certificate can lapse and need to be reapplied for.

Can a municipality refuse to issue the certificate over old debt from a previous owner? No, not once the amounts properly due under Section 118(1) — the two-year period — have been paid. The Constitutional Court confirmed in Jordaan v City of Tshwane (2017) that municipalities cannot use older, historical debt as grounds to withhold a certificate once the two-year figure is settled.

Can I be held liable for a previous owner's municipal debt after I buy a property? No. Once transfer is properly registered following issuance of a valid Section 118(1) certificate, historical debt incurred by a previous owner does not transfer to you as the new owner, according to the Constitutional Court's ruling in the Jordaan case.

What happens if the seller doesn't pay the outstanding amount? The municipality won't issue the clearance certificate, and the transfer cannot be registered until it's settled. This is typically resolved by paying the outstanding amount out of the sale proceeds through the conveyancer's trust account.

Does a sectional title unit need anything extra? Yes. In addition to the municipal rates clearance certificate, the Body Corporate's levies for the unit must be up to date, since all owners in a sectional title scheme share collective liability for the scheme's debt. This is handled separately from the municipal process.

What if money is left over in my municipal account after the sale? The municipality closes the account as of the registration date and reconciles the final balance. If a credit remains, your transferring attorney is generally responsible for requesting the refund into their trust account on your behalf.

Can the municipality still chase the previous owner for old debt after transfer goes through? Yes. The municipality can still pursue the former owner (the seller) personally for historical debt older than the two-year window — it just can't recover that debt from the new owner or use it to block or reverse a completed transfer.

Sources

• Local Government: Municipal Systems Act 32 of 2000, s 118
• Jordaan and Others v City of Tshwane Metropolitan Municipality and Others; City of Tshwane Metropolitan Municipality v New Ventures Consulting and Services (Pty) Limited and Others; Ekurhuleni Metropolitan Municipality v Livanos and Others [2017] ZACC 31; 2017 (6) SA 287 (CC) — SAFLII
• Deeds Registries Act 47 of 1937
• SchoemanLaw Inc, "Rate Clearance Certificates and What Municipalities Can't Do"
• Werksmans Attorneys, "Cleaning house" — analysis of the Jordaan Constitutional Court judgment
• Schindlers Attorneys, summary of the Jordaan Constitutional Court judgment (29 August 2017)

This article is for general informational purposes and does not constitute legal advice. Municipal processes, required documents, and clearance figures vary by municipality — confirm current requirements with your conveyancing attorney or the relevant municipality before relying on this information for a property transaction.