In South Africa, the buyer is generally responsible for paying transfer costs and transfer duty (where applicable), as well as the fees charged by the transferring attorneys.
Jacques Vorster, Principal of Century 21 Helderberg, Stellenbosch, Hermanus & Kleinmond and surrounds, says the seller typically pays the estate agent’s commission and the costs associated with obtaining compliance certificates such as electrical, gas or electrical fence certificates where required.
"These costs should always be clearly explained during the sale process so both parties understand their financial obligations," says Vorster.
Transfer duty is a government tax paid when purchasing property above a certain threshold and is calculated on a sliding scale based on the purchase price. According to Quay 1 International Realty. first-time buyers and those purchasing below the minimum threshold may be exempt, which can make a meaningful difference to upfront costs.
In addition to transfer duty, buyers should budget for transfer fees (paid to the conveyancing attorney), bond registration fees if a home loan is involved, deeds office fees, and sometimes initiation or clearance fees required by municipalities or estates. These costs are often overlooked, but they can add a significant amount to the total purchase price.
The key advice for buyers is to request a full cost estimate from a conveyancer early in the process. Understanding these fees upfront helps avoid surprises and ensures buyers are financially prepared to proceed with confidence.
According to conveyancers and property Law attorneys at Abrahams & Gross, the RCC issued by the city council certifies that there are no outstanding funds due to the municipality at the time of the registration of transfer to the purchaser. This certificate is a requirement in terms of the Deeds Registries Act and must be lodged in the Deeds Office. The Registrar of Deeds will not register the transfer of a property unless the conveyancer lodges a valid RCC along with other required documents at the Deeds Office.
Rates Clearance Figures
The conveyancer will make application to the city council for the issuing of rates clearance figures. Rates clearance figures are comprised of all arrears amounts for rates, taxes, electricity, water, sewerage, and refuse, as well as an advance payment covering a period of 60 days being the period of validity of the rates clearance certificate.
Whose responsibility is it to obtain a rates clearance certificate?
It is the seller’s responsibility to settle amounts due in order to obtain the RCC. Upon request, the seller must pay the conveyancer and not the city council directly. The conveyancer will then pay the city council to ensure that the payment is linked to the application number in respect of the transfer as well as for the purposes of expedition of the issuing of the rates clearance certificate.
Once the conveyancer has paid for and obtained the RCC, the seller’s account at the city council will be in credit and the seller will no longer be required make any further monthly payments to the city council prior to transfer.
Once registration of transfer has been completed, the conveyancer submits a refund form to the city council in respect of any credit that maybe be due to the seller. This usually occurs when the registration of transfer takes place prior to the expiration of the 60-day period. The city council takes approximately four to seven months to reconcile the seller’s and purchaser’s accounts and pay the refund.
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Gerhard van der Linde, MD of Seeff Pretoria East. Non-compliance can cause delays while full compliance can considerably speed up the sale and transfer process.
He recommends that sellers chat to the agent and possibly make use of a service provider for compliance vetting, and ensuring key aspects such as building plans, zoning conflicts, title restrictions, and servitudes are resolved.
The most important compliance issues generally include:
#1 - Installations. Various installations require Certificates of Compliance before the property can be transferred. While the various municipalities differ in terms of specific requirements, these usually include electrical and water installations, electric fences, and possibly also solar and gas installations. Certificates must be valid to cover the transfer period.
#2 - Building plans. While not necessarily a precondition, it is generally recommended that the seller obtains a copy of the building plans and ensures that all building works are approved and compliant. Anything which is not approved must be corrected, and signed off. Sellers must also ensure that all zoning requirements are met, and that there are no encroachments insofar as boundaries are concerned.
#3 - Disclosure of defects (Condition of Property Report). In terms of the Property Practitioners Act, sellers must disclose all known material defects, both patent (obvious) and latent (hidden) to prospective buyers before they make an offer. The Act mandates sellers to complete and sign a mandatory “Condition of Property Report” which must be annexed to the selling agent’s mandate, as well as the agreement of sale.
#4 - Rates Clearance Certificate. This certificate is required before the property can be transferred, and is usually obtained by the attorneys. It requires that all outstanding monies owed to the local municipality in terms of rates as well as utilities are settled in full, and most municipalities also require the lodging of funds to cover a period of time that it will take before the property is transferred. The surplus is refundable after transfer.
#5 - Other compliances. Some areas may also require additional compliance certificates which could relate to the safety of swimming pools or a lightning conductor on thatched roof properties in certain areas. Again, these are needed before the transfer can be effected and must be valid for an adequate period of time.
