Less hassle with rates clearance certificates?

Ask anyone who has ever done it; buying a home comes with a lot of paperwork. There are a number of important documents to prepare - from obtaining a home loan to certifying the building’s plumbing and electrical and, importantly getting a Rates Clearance Certificate.

A seller cannot sell their property legally without such a certificate. Obtaining such a certificate has been problematic due to financial end of the year billing, and other, issues at respective Municipalities across the country.

Bruce Swain, MD of Leapfrog Property Group explains the consequences of such a delay: “Since most sale agreements stipulate occupation takes place on transfer, it becomes exceptionally difficult for buyers and sellers to plan and co-ordinate their moves. Additional costs can be incurred where temporary accommodation needs to be arranged and furniture placed in storage, or worse, having to pack, unpack and pack again”.

The City of Cape Town decided to tackle the backlog by implementing an integrated property data management system, ISIS (Integrated Spatial Information System), which was exclusively designed at the end of 2011 to maximise efficiency. The project, which is more than a decade in the making, enables the City “to run a data analysis system within the work flow process, so that the data is automatically in the system for managers to use”, according to Alderman Marian Niewoudt.  

In essence, ISIS integrates the City’s property management systems, information and records into one electronic system. ISIS was combined with Korbitec’s with the aim of making it simpler and more cost effective for attorneys to get Rates Clearance Certificates. Although the switchover was not without its hiccups, according to Cher Chapple, General Manager of Municipal Services at Korbitec, functionality has improved substantially; between 5, 000 – 6, 000 certificates are processed per month. Provided there are no queries, these are processed within 10 to 12 days upon receiving payment and the required documentation.

Currently the system requires precision, implying, for example, that the correct suburb or sub-suburb needs to be indicated; if this is not done, the system will query the application. As such, the main hurdle at present is human error.

It would seem that matters in Johannesburg, Pretoria and Ekurhuleni are a different story. Transfer Attorneys indicate that they still wait up to 21 working days just for the figures needed before payment can be made and the certificate issued. If there is a query attached to the application, it can take up to six –eight weeks to process.

“Korbitec has been commissioned by the City of Johannesburg to run a pilot project which we are currently doing. Hopefully the City will make the transition to an electronic system soon”, says Chapple.
It is curious that Johannesburg is not using the system as it is offered free of charge and Korbitec regularly trains users in its management.  Currently between 3, 000 and 4, 000 certificates are processed manually, not only a much smaller percentage than in Cape Town but, also at a much slower pace.

“The biggest hurdle for property buyers has been obtaining a home loan. That has now changed with banks easing up on their lending criteria. Sellers have become, and I think will continue to become, more reasonable with their asking prices. There’s so much going for the market now it would be great if municipalities could assist the effort by getting the necessary rates clearance certificates issued in a timely fashion”, says Bruce Swain, MD of Leapfrog Property Group.

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