Are you currently in the process of selling your house? If so, you will soon be contacted by your attorney asking you for a payment enabling them to obtain a rates clearance certificate. This certificate is issued by the local municipality and confirms that your rates and taxes have been paid in advance.
Obtaining a rates clearance certificate can become costly in terms of both money and time. Taking a monthly rates and taxes bill of R2 500, the seller may be asked to pay R12 500 upfront as payment for five months in advance, which is a common requirement in order to obtain the necessary certification.
Payment is required at least two months before the attorney can transfer the house to the buyer, as the certificate needs to be submitted, with other relevant documents, to the Deeds Office, which then authorises the transfer of the house.
Obtaining a rates clearance certificate can become costly in terms of both money and time. Taking a monthly rates and taxes bill of R2 500, the seller may be asked to pay R12 500 upfront as payment for five months in advance, which is a common requirement in order to obtain the necessary certification.
This is a large sum, particularly if unexpected and not budgeted for. As a result, the transfer process can be slowed down, proving frustrating for both the buyer and the seller, as well as resulting in further costs such as occupational rent.
Mari van Wyk, General Manager of the Attorney Segment at Korbitec, explains that once the initial sales document is signed, sellers will typically need to be contacted further during the process to provide funds to cover the rates clearance amount and administration fees.
"This can put great financial pressure on the seller, who doesn’t yet have access to the proceeds of the sale, and can have a major impact on the speed of the process, as the attorney is required to request and further check funds, before performing up to two transactions per rates clearance certificate."
However, there are alternative solutions available to assist the seller in ensuring they will not need to spend all their available cash on these expenses. Instead, they can retain these funds for other costs involved in moving home such as a moving company or fix-ups and renovations on the new house.
Korbitec recently launched Payment Solutions, a service designed to expedite and simplify the property transaction process for sellers and conveyancers. This unique service, says van Wyk, significantly reduces the hassles and delays associated with the settlement of rates clearance payments, by providing the seller with credit to be used to cover rates clearance and administration fees typically arising during the course of a sale.
“Korbitec removes all this hassle by pre-authorising funds on the seller’s behalf, which we then pay directly to the municipality once the rates application has been completed.”
She says it is vital that sellers know what to expect from the property sale process and are able to take advantage of options that can assist in making the transfer process run smoothly and efficiently, allowing them to avoid financial concerns.
For more information, ask your attorney for Payment Solutions to assist with your financial obligations or visit www.korbitec.com.
Print
