© 2016 by Phillip Silver Mathura Inc. 

Congratulations on the sale and successful transfer of your property. We wish you all the best for the future.

 

However, before you can completely forget about your previous property and start focusing on your new home, you need to close your utility account with your Municipality.

 

Kindly be aware that sectional title accounts and accounts for freestanding property are the same. The only difference is that a rates account for sectional title does not include water and electricity but simply refuse and waste disposal. Water and electricity is always reflected on the body corporate’s levy statement. Utility accounts for freestanding properties include inter alia water, electricity, waste disposal and refuse.

 

Here is a simplified summary of what occurs at the Municipality once a property is registered into the name of a purchaser and what is required to be done by the seller:-

 

  1. The property is registered at the Deeds Office into the name of the purchaser.

  2. The transferring attorneys send a letter to the Municipality stating that registration has occurred.

  3. Within 8 (eight) weeks of registration of the property, the Deeds Office sends the information via direct link to the Municipality so that they may update their systems.

  4. The Municipality then should respond to this information received by closing the seller’s rates account and by opening the purchaser’s rates account.

  5. This is where the problem arises as more often than not this is not done by the Municipality.

  6. Therefore, the seller needs to close his or her rates account.

  7. Importantly, the seller will be unable to close his or her account if the purchaser has not opened his or her account.

  8. This is to protect the Municipality so that there is always an account linked to a property.

  9. Once the purchaser has opened his or her rates account, the seller needs to attend the offices of the Municipality to close his or her account.

  10. The seller must have the following documents at his or her disposal in order to close his or her account: a letter from the transferring attorneys stating that the seller’s property has been transferred into the name of the purchaser; a utility bill for the property indicating the account number; and ID documents for the seller.

  11. A seller will know when his or her account has been closed as he or she will not receive any further accounts from the Municipality.

  12. Adjustments are done once the seller’s account has been closed.

  13. The Municipality reverses any incorrect charges that were levied against the seller’s account from date of transfer onwards.

  14. Adjustments can take several weeks to complete as they are processed by the different municipal departments responsible for those services.

  15. Refunds owing to the seller can only be applied for once the seller’s account has been closed and the Municipality has successfully adjusted the charges that were levied against the seller’s account after transfer.

  16. The seller must have the following documents at his or her disposal in order to obtain a refund from the Municipality: a letter addressed to the City of Johannesburg requesting that such refund be paid out to the seller. The letter should include the purchaser’s and seller’s names, the property description, transfer date and to whom the refund should be paid along with the respective banking details; the receipt/EFT receipt or a copy of the cheque obtained when making payment of the clearance figures; a bank statement or cancelled cheque reflecting the bank details of the seller; and ID documents for the seller.

  17. The Municipality should then refund the amount due to the seller.

 

Please be aware that this is a simplistic summary of the process and that the Council systems are tediously bureaucratic and therefore less than efficient. The requirements for the closure of a rates account, the adjustment and the refund process are also subject to change.

 
 

SELLER

PURCHASER

Congratulations on the purchase of your property. We wish you all the best in your new home.

 

As you are well aware, you need to open a utility account with your local Municipality so that you can pay for the services that you receive.

 

Kindly be aware that sectional title accounts and accounts for freestanding property are the same. The only difference is that a rates account for sectional title does not include water and electricity but simply refuse and waste disposal. Water and electricity is always reflected on the body corporate’s levy statement. Utility accounts for freestanding properties include inter alia water, electricity, waste disposal and refuse.

 

Here is a simplified summary of what occurs at the Municipality once a property is registered into the name of a new owner and what he or she is required to do:-

 

  1. The property is registered at the Deeds Office into the name of the purchaser.

  2. The transferring attorneys send a letter to the Municipality stating that registation has occurred.

  3. Within 8 (eight) weeks of registration of the property, the Deeds Office sends the information via direct link to the Municipality so that they may update their systems.

  4. The Municipality then should respond to this information received by closing the seller’s rates account and by opening the purchaser’s rates account.

  5. This is where the problem arises as more often than not this is not done by the Municipality.

  6. Therefore, the seller needs to close his or her rates account and the purchaser is required to open a new rates account with the Council.

  7. Importantly, the seller will be unable to close his or her account if the purchaser has not opened his or her account.

  8. This is to protect the Municipality so that there is always an account linked to a property.

  9. Therefore, the purchaser needs to attend the offices of the Municipality and open a new account in his or her name.

  10. The purchaser must have the following documents at his or her disposal in order to open a new account: a letter from the transferring attorneys stating that the seller’s property has been transferred into the name of the purchaser; and ID documents for the purchaser.

  11. A purchaser will know when his or her account has been opened when new account numbers are issued to him or her.

  12. Once the purchaser has successfully opened his or her account with the Municipality being equipped with a new account number, he or she should inform the seller that this has been done.

 

Please be aware that this is a simplistic summary of the process and that the Council systems are tediously bureaucratic and therefore less than efficient. The requirements for the opening of a rates account are subject to change.