Why clearance is required
A clearance certificate is a statutory confirmation from an authority with a claim against the property — the municipality, a body corporate, or a homeowners’ association — that all money owed to that authority on the property has been paid. The Deeds Registry will not register a transfer without each of the applicable clearance certificates physically lodged with the transfer deed. It is a gate: without clearance, no transfer; without transfer, no sale.
The gate exists because of a deliberate policy choice. South African municipalities rely on rates and service charges for the bulk of their operating revenue, and municipalities face significant debtor collection challenges. By making transfer contingent on full payment of the preceding two years of municipal charges, section 118(1) of the Municipal Systems Act gives the municipality a point of leverage it would otherwise lack. The same logic applies to body corporates under the Sectional Titles Act: the scheme’s solvency depends on levies, and the levy clearance requirement forces settlement of any arrears before ownership moves on.
For the buyer the clearance requirement has a practical benefit: the property arrives clean. When transfer registers, every preceding rate, refuse charge, water bill and levy is paid up, and the new owner starts fresh. The old concern — that a new owner might inherit the previous owner’s arrears by reading the wrong section of the Municipal Systems Act — was decisively laid to rest by the Constitutional Court in 2017 (discussed below).
Rates clearance (municipal)
Rates clearance is governed by section 118(1) of the Local Government: Municipal Systems Act 32 of 2000. The section is short and consequential:
“The Registrar of Deeds may not register a transfer of property except on production of a prescribed certificate issued by the municipality or municipalities in which that property is situated, which certifies that all amounts due in connection with that property for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certificate have been fully paid.”
Three features of the section matter in practice. First, the two-year look-back — the municipality can only demand payment of amounts owed in the preceding 24 months as a precondition for clearance; older debt cannot hold up a transfer. Second, the certificate is issued by the specific municipality in which the property sits (Tshwane for Pretoria; City of Johannesburg for Johannesburg; eThekwini for Durban; and so on). Third, under s 118(1A), the certificate has a statutory validity period — in Tshwane, 60 days from the date of issue — after which it expires and a fresh certificate must be applied for.
The process in Pretoria is well-established. The conveyancer applies electronically to the City of Tshwane for clearance figures, which quantify what the seller must pay to obtain the certificate — the outstanding rates and services to date plus four to six months of rates and services billed in advance. The seller pays the figures into the conveyancer’s trust account, the conveyancer pays the municipality, the municipality issues the clearance certificate, and the conveyancer lodges it with the transfer deed at the Deeds Office. Tshwane issues figures within 10 to 15 working days for most properties; Johannesburg is often slower.
Levy clearance (sectional title)
For a unit in a sectional title scheme, a levy clearance certificate is required under section 15B(3)(a)(i)(aa) of the Sectional Titles Act 95 of 1986. The section provides that the Registrar of Deeds may not register the transfer unless the body corporate has certified that all moneys due to the body corporate by the transferor in respect of the unit have been paid, or that provision for such payment has been made to the body corporate’s satisfaction. The certificate is issued by the body corporate, in practice through its managing agent (the professional firm administering the scheme’s affairs).
Levy clearance covers a wider range of amounts than rates clearance. The managing agent will not issue the certificate until the seller has paid:
- Monthly levies due for the current month and any arrear months.
- Special levies raised by the trustees for specific purposes (capital repairs, legal costs, reserve fund top-ups).
- Fines and penalties imposed under the scheme rules and any interest on overdue amounts.
- A prepayment of levies up to the end of the month in which transfer is expected to register, and sometimes a buffer beyond.
- The managing agent’s administration fee for processing the clearance.
Sectional title arrears are the single most common cause of a sectional title sale collapsing. The earlier in the transaction the seller settles the scheme bill, the smoother the transfer — and a seller who knows there is an arrear should disclose it to the conveyancer on day one so that the managing agent can be engaged before the sale narrative gets locked in.
HOA clearance (non-sectional)
A freehold estate run by a home-owners’ association (HOA) sits outside the Sectional Titles Act, but the practical effect is the same. The estate’s founding documents and the title deed to each unit impose a restrictive condition that no transfer may be registered without the HOA’s written consent. The HOA, acting through its committee or managing agent, withholds consent until all levies, penalties and administrative charges are settled. The conveyancer obtains a clearance letter from the HOA confirming consent and all debt paid, and lodges it with the transfer.
Because HOAs are creatures of contract rather than statute, the wording of the title condition and the HOA’s rules govern. Some HOAs require pre-transfer inspections (exterior paint colour, landscaping conformity, approved plans); others charge a clearance fee on top of levy arrears; and a few require the buyer to sign the HOA’s deed of undertaking before the clearance is issued. None of this is unreasonable, but it can extend the timeline. Engage the HOA early, especially in gated estates with strong architectural guidelines.
The Jordaan v Tshwane protection
Before August 2017 there was uncertainty about a disturbing question: could the municipality use s 118(3) of the Municipal Systems Act to recover historical municipal debts from the new owner of a property, even after transfer had registered on a valid clearance certificate? Section 118(3) declares that municipal debts in respect of the property are a charge upon the property and rank above a registered mortgage bond. Some municipalities read the provision as creating a “following charge” that survives transfer — meaning a new owner could be held personally liable for the previous owner’s arrears going back further than the s 118(1) two-year look-back.
The Constitutional Court put the issue to rest in Jordaan and Others v City of Tshwane Metropolitan Municipality and Others [2017] ZACC 31. Decided 29 August 2017, the judgment held that interpreting s 118(3) to make a new owner personally liable for historical municipal debt would be an unconstitutional arbitrary deprivation of property under section 25(1) of the Constitution. On the court’s reading, the s 118(3) charge is extinguished against the new owner at the moment of transfer. The municipality retains a claim against the previous owner personally — but it cannot follow the property into the hands of the new owner.
The effect is that a buyer who takes transfer on a valid s 118(1) clearance certificate is protected. Any historical municipal debt older than the two-year look-back is a matter between the municipality and the previous owner. This is one of the more consequential property judgments of the post-constitutional era and it is the reason conveyancers today can hand a buyer clean title with confidence.
What clearance costs
Rates clearance is not a “fee” in the narrow sense — it is a payment of outstanding plus several months of prepaid rates and services, most of which represents actual municipal liability rather than administrative cost. Typical Pretoria ranges:
- Residential freehold, Tshwane. Rates clearance figures commonly land between R3,000 and R15,000, depending on the property’s assessed rates and the service account (water, refuse, sewerage). Higher-value properties, large erven and properties with large water consumption will pay more.
- Sectional title unit. Rates clearance is lower because the municipal bill is smaller — but the levy clearance sits alongside it, typically 1–3 months of levies prepaid plus any special-levy arrears and the managing agent’s administration fee (R500 to R2,500).
- HOA estate. HOA clearance figures vary widely. Some HOAs charge a flat administrative clearance fee (often R1,000 to R5,000); others require a levy prepayment similar to sectional title; a few require pre-transfer inspections that may trigger remedial costs.
- Refunds. Rates and levies paid in advance but not actually consumed before registration are refundable to the seller, by the municipality or managing agent respectively. Refunds are typical but often slow (weeks to months).
Timeline and delays
Clearance is one of the three most common causes of a transfer running past its expected registration date (alongside bond approval and the Deeds Office examiner queue). Planning around realistic turnarounds is the difference between registering on time and renewing an expired certificate.
| Certificate | Typical turnaround | Validity |
|---|---|---|
| Tshwane rates clearance (figures) | 10 to 15 working days | 60 days from issue (s 118(1A)) |
| City of Johannesburg rates clearance | Often slower — commonly 3 to 6 weeks | Per municipal prescription |
| Sectional title levy clearance | 5 to 10 working days with a cooperative managing agent | Typically until end of registration month |
| HOA clearance letter | 5 to 15 working days, longer with pre-transfer inspections | Per the HOA’s rules |
Common causes of clearance delay:
- Billing disputes. Estimated meter readings, incorrectly-posted payments, or a service account under query — all of which require resolution before the municipality will quantify clearance figures.
- Large arrears. A distressed seller with significant arrears may need weeks to assemble the cash; an insolvent seller may require a formal arrangement with the creditor bank.
- Certificate expiry. A certificate issued too early, then held while the bond is resubmitted or an examiner’s note is addressed, may expire before registration. Re-application repeats the cost and the wait.
- Scheme disputes. A sectional title trustee refusing clearance because of a disputed fine, or an HOA withholding consent on an unresolved architectural issue, forces an internal resolution before the transfer can move.
Frequently asked questions
The transfer cannot register until every cent is paid. The rates clearance certificate under section 118(1) of the Municipal Systems Act will not be issued while arrears remain, and the body corporate will refuse to sign a levy clearance while levies are owing. On registration, the transferring attorney pays the arrears from the sale proceeds before anything else flows to the seller. If the arrears exceed the equity the seller has in the property — the typical distress scenario — the deal collapses, or requires the seller to bring additional money to the table, or triggers a formal assistance process with the bondholder. A seller who suspects arrears should flag it to the conveyancer at the outset so the figures can be requested early and the shortfall addressed on terms rather than at registration.
The seller does — not the buyer. The municipality requires several months’ worth of rates and services to be paid in advance as part of the clearance figures, typically four to six months, to cover the period until registration and a short buffer thereafter. Unspent amounts are refunded to the seller by the municipality after transfer, although the refund process is often slow. The buyer, in turn, starts paying rates from the date of registration (or the date of occupation if earlier, depending on the OTP). For a sectional title unit the body corporate similarly requires levies paid to the end of the month of registration; special levies must be settled in full.
A home-owners’ association (HOA) is the governing body of a non-sectional residential estate — standalone freehold units bound together by the title conditions and HOA rules. HOAs are creatures of contract, not statute: there is no equivalent to s 15B(3) of the Sectional Titles Act, and each HOA’s constitution governs its levy regime and clearance requirements. Almost universally, the title deed contains a condition that no transfer may be registered without the HOA’s written consent, and that consent is withheld until levies and administrative charges are paid. In practice, the conveyancer requests a clearance letter from the HOA or its managing agent, equivalent in effect to a sectional title levy clearance, and lodges it with the transfer.
Under section 118(1A) of the Municipal Systems Act, a rates clearance certificate is valid for a prescribed period from the date of issue. In the City of Tshwane the certificate is valid for 60 days, which is the common position nationally although certain municipalities specify a slightly different window. If registration is not secured within the validity period — say because of an unexpected delay in the bond or an examiner’s note that takes longer than anticipated — the certificate must be re-applied for and a fresh set of figures paid. That almost always means more rates in advance. Because of this, conveyancers try to time the clearance application so that the certificate is issued as close to the expected registration date as possible, without introducing avoidable delay.