To date, a seller may not transfer a property unless he/she has a municipal clearance certificate for the past two years of bills. However older debt arising before the two-year cut-off becomes the liability of the new owner and failure to pay entitles a municipality to attach and sell the property to settle such debt.
However, this section of the Local Government Municipal Systems Act was declared unconstitutional by the High Court in Pretoria on Monday, 7 November 2016.
According to Judge Dawie Fourie, the section unjustifiably limits the new owner’s property rights under the Constitution and while the purpose was to ensure a municipality’s economic viability, it does not justify forcing the new owner to pay. Fourie also stated that municipalities have no right to refuse municipal services if the historic debt wasn’t settled.
South African Local Government Association spokesman, Sivuyile Mbambato, said that although the association welcomed the judgment, it comes at a time when municipalities are facing strain. However, these issues can be avoided if consumers pay on time and if municipalities collect on time.
Spokesman for the Tshwane mayor, Samkelo Mgobozi, warned that going forward, nobody should be allowed to deregister and change property if outstanding rates and taxes are not up to date.