Closure Of An Existing Account And Applying For A Refund From The Municipality

All property owners are required to pay rates and taxes.  A new homeowner (Purchaser) cannot inherit an existing rates, water and electricity account from a previous owner (Seller). In South Africa, each Municipality works slightly differently, and there may be a few minor changes from one Municipality to the next as to how an account is closed and how a new one is opened/

Typically, on registration of the transfer, the Transferring Attorney sends a letter to the Municipality notifying them that registration of transfer has taken place. The transferring Attorney will also advise the Municipality of all relevant information relating to the transfer specifically the date of registration of transfer, as well as the details of the Purchaser.

The respective Deeds Office will also independently notify the relevant Municipality of registration of the transfer. This notification takes place between 6 -10 weeks from date of registration of the transfer. Most Municipalities require the Seller to attend to their offices to request closure of the account and processing of refund despite receiving notification that the transfer has taken place. Similarly, they also require the Purchaser to attend to the offices in order to open a new Service Account and pay a deposit if applicable.

What documents must the Seller take to the Municipality to close an existing account?

The Seller, when attending to the Municipality must take the following documentation with them:

• Copy of ID;
• Copy of the letter from the Transferring Attorney confirming registration of transfer;
• The Rates clearance certificate as well as the receipt number (this information will be provided to you by the Transferring Attorney); and
• Copy of the proof of payment made by the Transferring Attorney to obtain a rates clearance certificate.

Not all Sellers are entitled to a refund on the rates and taxes once the Municipality has closed the account and attended to the recon. It goes without saying that as a Seller you will be required to pay all, if any, outstanding monies due to the Municipality before you can close your account. 

In the event that the Seller is entitled to a refund, the Municipality will pay the refund to the Transferring Attorney Trust Account to avoid fraud. The Transferring Attorney is obliged to pay the money over to the Seller once they have received the refund.

What documents must the Purchaser take to the Municipality to open a new Service Account?

The Purchaser, when attending to the Municipality must take with them the following standard documents:

• Copy of ID;
• Copy of the letter from the Transferring Attorney confirming registration of transfer; and
• Payment in respect of the required deposit.