After your property transfer registers, how do you deal with your municipal account?

Steps to take at the Municipality when your property transfer registers.

So you’ve received the exciting news that your property transfer has registered, but now you have to figure out the municipal account change-over. It’s not that complicated if you know what to expect and what steps to take. This article looks at the process in the Nelson Mandela Bay Municipality. It is important to remember that each municipality may work differently and this process may change from time to time.

When you have purchased a property and you have received confirmation from your conveyancer that the property is registered in your name, usually in the form of a letter from the conveyancer, you will need to go to the municipality to open your new municipal account.

When you have sold a property and you have received confirmation that the property has been registered in the purchaser’s name, you will need to go to the municipality to close your municipal account and request any refund due to you.

It is best if both seller and purchaser go to the municipality as soon as possible after registration of the property transfer to avoid charges on the incorrect account. However, once the purchaser has opened the new account the seller’s municipal account should automatically be closed on the municipality’s side even if the seller doesn’t go to the municipality themselves.

You do not need to take the registered title deed with you to the municipality, the letter from the conveyancer will be sufficient.

Municipal Rate Clearance Certificates

Let’s take a few steps back and consider the Rates Clearance Certificate required for registration of a property transfer at the Deeds Office. Your conveyancer will need to obtain a certificate from the municipality stating that all outstanding rates have been paid up before the property transfer can register. In order to obtain this certificate, the conveyancer will request the outstanding rates amount from the municipality and let the seller know how much they need to pay. Once this payment has been made, the conveyancer can request the clearance certificate and once it is received, the property transfer can register.

There will be some time between the date that the municipality sends the outstanding rates amount to the conveyancer and the date that the transfer registers because the certificates don’t come on the same day that the payment is made and the transfer documents will be at the deeds office for a few days before registration takes place.

It is important to remember that the seller is still liable for the rates until the date of registration. To ensure that the correct parties pay the correct amounts, the conveyancer will ask the municipality for the outstanding rates amount again on the date of registration and then calculate the pro-rata portions that the seller and purchaser are liable for, depending on what day in the month the property transfer registered.

The conveyancer will then send out final statements to the seller and purchaser reflecting all amounts received and paid out. This statement will show the municipal rates amount which each party was liable for and covered in the month of registration.

Municipal Refund Requests

The seller’s deposit will be credited upon closure of the account and will first offset any outstanding amounts on the municipal rates account and then the remaining credit balance will be refunded. It is important to remember that you will need to request a refund from the municipality and the refund is not automatically issued to the seller on closure of the account. To request the refund you will need to visit your nearest Municipal Customer Care Office with the required documents. Only the municipal account holder can request the refund.

Before you head off to the municipality, here is a checklist of what documents you need to take with you:

Domestic – Residents of NMBM

• Stamped copy of consumer’s 1 month bank statement or original cancelled cheque (not older than two months). The name of the bank statement must be in the same name as the NMBM account holder.
• Original Certified Copy of the consumer’s I.D. Certification not older than two months
• Latest payslip if NMBM staff member

Domestic – Out of Town 

• Stamped copy of consumer’s 1 month bank statement or original cancelled cheque (not older than two months). The name of the bank statement must be in the same name as the NMBM account holder. [no faxed or scanned copy accepted]
• Original Certified Copy of the consumer’s I.D. Certification not older than two months.
• Letter requesting the refund and stipulating the current out of town address signed by the account holder.

Business

• Stamped copy of consumer’s 1 month bank statement or original cancelled cheque (not older than two months). The name of the bank statement must be in the same name as the NMBM account holder.
• SARS tax certificate (original)
• Letter of incorporation
• Certified ID copy of company’s director or trustee (Certification not older than 2 months)

Deceased Estate

• Copy of death certificate.
• Stamped  1 month bank statement or original cancelled cheque (not older than two months).
• I.D. of the spouse or beneficiary.
• Letter of authority or Letter of executorship and will of deceased (if applicable).

Stop Order off someone else’s account

• Produce proof of payment (pay slip or debit order from bank statement).
• Affidavit stating that the that he is the person paying the stop order.
• A letter from the account holder giving permission that the money may be
• paid to the person paying the stop order.
• Stamped  1 month bank statement or original cancelled cheque (not older than two months).
• The above list was provided by the PE Municipality, but may change from time to time.

If you have any other queries regarding the municipal account changeover or if you encounter any difficulties, your conveyancer should be able to assist you.

At Pagdens, we feel that it is important for our clients to understand and feel comfortable with the processes involved in property transfers so that they can trust us to take the necessary steps and keep them in the loop with the progress. You can trust us to take care of your property transfer efficiently so that you can focus on the move and the new chapter you are about to embark on. Find out more about our Conveyancing Department at pagdens.co.za/legal-service/property or contact us for more information.

This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)