Why This Matters Before You Buy
When you purchase a property in South Africa, a rates clearance certificate is required before transfer can occur. This certificate confirms that all municipal charges — rates, electricity, water, sewerage, and refuse — have been paid up to date (usually two to three months in advance). If the seller has significant arrears, these must be paid before transfer, typically out of the proceeds of the sale.
However, the rates clearance process only occurs at transfer stage. By then, you have signed the offer to purchase, paid a deposit, and may be months into the conveyancing process. Discovering large arrears late in the process causes delays, renegotiations, and occasionally deal collapses. Checking for municipal debt before signing the offer to purchase is far preferable.
How to Check Before Making an Offer
Ask the seller or estate agent for the most recent municipal account statement before you make an offer. Sellers are not legally obliged to provide this before the sale, but most will if asked directly — it costs them nothing and avoids problems later. A current account statement shows the outstanding balance on all municipal services and whether there are any arrears.
Red flags on an account statement:
- A negative balance (the municipality owes the seller money) — this is fine and will be paid to the seller
- A large positive balance (arrears) — this must be settled before transfer
- Inconsistent or missing utility consumption entries — may indicate the meter has been bypassed or the account is in dispute
How to Request a Municipal Account Enquiry Directly
You can request an account balance directly from the municipality using the property's erf number (found in the title deed or on the estate agent's property listing). Most South African metros allow this:
- City of Cape Town — via the My Cape Town portal or by visiting a walk-in centre with the erf number
- City of Johannesburg — via the Joburg eServices portal
- City of Tshwane — via the eServices portal with the account number or erf number
- eThekwini — via the durban.gov.za portal
Note that not all municipalities have online enquiry facilities — smaller municipalities may require a personal visit or a written request.
What Happens if There Are Significant Arrears
If the seller has accumulated significant municipal arrears, the conveyancing attorney will require these to be settled before applying for a rates clearance certificate. In practice:
- The arrears are paid from the seller's proceeds at registration
- If the arrears exceed the seller's equity, the sale may not be financially viable for the seller
- In some cases, buyers negotiate to pay the arrears as part of the purchase price adjustment — but this carries risk if the municipality's records do not match the seller's disclosure
Your conveyancing attorney will identify and manage this as part of their process. If you discover arrears before signing, you have the opportunity to negotiate the purchase price or make the clearance of arrears a condition of the sale.
Sectional Title and HOA — Additional Checks
For sectional title units, also request a levy clearance certificate from the body corporate — this confirms that all levies have been paid to date. For properties in homeowners' associations, request an HOA clearance. Both are required for transfer and both represent potential seller obligations that can delay the process if outstanding.