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Validity

19 January 2006

Much has been said and much has been read about section 118 of the Local Municipal Systems Act, 32 of 2000 which reads as follows:

"Restraint on transfer of property
118. (1) A registrar of deeds or other registration officer of immovable property may
not register the transfer of property except on production to that registration officer of a
prescribed certificate-
(a) issued by the municipality in which that property is situated; and
(b) which certifies that all amounts due in connection with that property for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certificate have been fully paid.
(1A) A prescribed certificate issued by a municipality in terms of subsection (1) is valid for a period of 120 days from the date it has been issued.
(2) In the case of the transfer of immovable property by a trustee of an insolvent estate, the provisions of this section are subject to section 89 of the Insolvency Act, 1936 (Act No. 24 of 1936).
(3) An amount due for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is owing and enjoys preference over an; mortgage bond registered against the property.
(4) Subsection (1) does not apply to -
(a) a transfer from the national government, a provincial government or a municipality of a residential property which was financed with funds or loans made available by the national government, a provincial government or a municipality; and
(b) the vesting of ownership as a result of a conversion of land tenure rights into ownership in terms of Chapter 1 of the Upgrading of Land Tenure Rights Act, 19991 (Act 112 of 1991):

Provided that nothing in this subsection precludes the subsequent collection by a municipality of any amounts owed to it in respect of such a property at the time of such transfer or conversion.

(5) Subsection (3) does not apply to any amount referred to in that subsection that became due before a transfer of a residential property or a conversion of land tenure rights into ownership contemplated in subsection (4) took place."


In terms of subsection (1), a prescribed certificate must be submitted to a registrar of deeds.However, although prescribed, this provision is not strictly being adhered to and both the old certificates and the prescribed certificates are still being accepted for registration purposes.

Section 118(1A) clearly provides that the certificate is valid for 120 days from "date of issue". "Date of issue" has not been defined and uncertainty prevails over whether it is from the date of signing or the date of the official date stamp. It is submitted that the date of issuing (signing) will be the date from which the 120 days should be calculated.

Prior to the issuing of Chief Registrars Circular 11 of 2005, it was the practice of certain deeds controllers not to permit the registration of immovable property where the 120 days had expired, irrespective of the validity date on the clearance certificate. In terms of the said circular, the Chief Registrar has advised all registrars of deeds to accept for registration purposes a certificate for which the validity date is a date more than 120 days from the date of issue. Such later date must be regarded as the date of expiry of the certificate and not the 120 day period from date of issue (see also Chief Registrars Circular 10 of 2004).

Republished with permission

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