Rates backlog hits eThekwini property sales

File picture: James White/Free Images

File picture: James White/Free Images

Published Sep 28, 2016

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Durban - Severe backlogs in the eThekwini municipality rates department to get rates clearance certificates have left property sales worth millions hanging in the balance.

Rates clearance certificates have to be obtained from the municipality to confirm that all municipal tariffs owed on the property are paid up, to avoid buyers being saddled with historical debt.

Samantha van Rooyen, a conveyancing attorney at Morris Fuller Williams, said the firm had about 30 matters that had been affected by the delays.

In at least one case, the parties had been waiting for a rates clearance certificate since June this year.

“It creates problems for the seller, buyer, attorney and the estate agent because nothing can move forward until we get that certificate.”

Van Rooyen said the delays began in June after the city went on to a new billing system.

Jonathan Acutt, managing director of Acutts Estate Agents, said the delays placed buyers, in particular, in a precarious position in an already trying climate.

“For buyers, what it means is that from the time the bond is granted until it is registered, their financial positions have to remain the same. That means they cannot apply for a R1 000 extension on their credit card, buy a car or even sell one. They cannot miss any payments on their accounts because the bank has a right to pull the bond if their position changes.”

He said the delays with the rates clearance certificates meant that buyers were left in limbo, unable to change anything in their finances for a longer period of time.

“Buyers are being held hostage in terms of their financial positions and can end up paying occupational rent when they should be putting away money towards their bond. We had a matter where the bank pulled away the bond at the eleventh hour because of a change.”

Staff

Attorney Bruce Forrest from Meumann White Attorneys said they had also been affected by the delay.

He said about 30 percent of their matters were affected and he understood part of the backlog was due to staff having to be trained on the new system.

“As a firm of conveyancers, we are concerned about the lengthy delays and we are actively engaging with management of the rates department to resolve this.”

Forrest said some of the delays could be explained because the municipality had a policy of actively looking for historical debt on each matter.

“This is done to prevent the purchaser being burdened with that historical debt after transfer. These searches for the debt will cause delays.”

He also said that he was aware that municipal staff had worked at the weekend to try to minimise the backlog and as a result several outstanding matters were dealt with.

Craig Allsopp, franchisee of the Rawson Property Group’s Glenwood franchise, said his business had been affected as the time frame to get clearance certificates had gone up.

“It is frustrating. The implementation of eThekwini’s new system has been problematic for both our rentals and sales departments. This delays our transfers at the Deeds Office and puts pressure on our cash flow and day-to-day running of our business.”

eThekwini spokeswoman Tozi Mthethwa said the municipality moved to the new billing system, known as the revenue management system (RMS), from July 1 this year.

She said the system had been established to provide debt management and effective customer relations through an integrated system.

“The system is effective; however it has taken longer than anticipated to ensure that all staff members are trained on how to use the system. All staff have now been trained.”

The time taken to register properties remained at 6-8 weeks; this had not changed.

“However, due to the backlog accumulated during migration to the new system, the transfer period is extended in cases there are issues with that particular property.”

She said such issues might include if the building was derelict or there had been evidence of tampering with a meter on the property.

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THE MERCURY

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