It is important that new owners of property check the rates account is properly registered in their name to avoid billing problems at a later stage.
Steward says she has seen cases where the buyer had been in occupation for several months without asking why he was not receiving any rates bills.
Billing of new property owners for services supplied by the municipality will only take place once the Deeds Office has notified the municipality that the transfer of ownership has taken place, says Lanice Steward, MD of the Cape Town estate agency, Anne Porter Knight Frank.
She says buyers and sellers are quite often are not aware of this and she has seen cases where the buyer had been in occupation for several months without asking why he was not receiving any rates bills.
“In the meantime these bills were going to the seller, who now lived elsewhere and who either did not receive them or who thought that somehow the new owner would be paying anyway.”
Sometimes, says Steward, neither party was aware of the non-payment until the services were finally cut off.
The legal firm, Smith Tabata Buchanan Boyes, says Steward, has pointed out that there are often backlogs in the transfer information service to the municipalities.
They have also shown that although the seller is usually liable for all rates payments up to the date of transfer – and for up to four months thereafter – the sales agreement can alter these conditions specifying that the purchaser takes over the rates payments from any date.
Steward says it is therefore essential to get complete clarity and agreement on this matter at the outset.
She warns, too, that problems have been caused by the Deeds Office’s time lags in sending through new ownership information to the municipality. In Cape Town this can often take three months (which is why up to four months advance rates payment is demanded of the seller).
The reinstatement of services after they have been cut off is not always a simple, straightforward process and can take time, says Steward. “To avoid this, buyers and sellers must be aware of the rates payments conditions and find out exactly where their sales agreement has placed them.”
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