Seller's Right to Refuse Excessive Rates

A recent decision made by the Supreme Court of Appeal has declared that Municipalities are not allowed to request payment for rates, fees and other charges that extend for an unreasonably lengthy amount of time beyond the date of the Clearance Certificate.

The ruling was delivered on 29 March 2017 in the case of Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd. Click here to see the full order.

A Clearance Certificate is required in order to successfully register the transfer of immovable property. This is issued by the relevant Municipality in the area that the property is situated. The Seller is required to pay an amount determined by the Municipality, which is a projected amount usually 3-6 months in advance.

The ruling now allows Sellers to refuse to pay an amount beyond the date of the Clearance Certificate.