The Customer is Always Wrong

Private Property South Africa
Property Professional

According to the Johannesburg Municipality, it is the rate payers themselves who are to blame for the backlog in the issuing of rates clearance certificates.The most stressful part of selling a property is finding a buyer who either has the cash or is in a strong position to raise a bond. Right? Wrong! It appears the most harrowing part of selling a property, at least if you live in Johannesburg, happens after the sale agreement has been signed and after the finance has been arranged. Conveyancing attorneys in the city of gold are apparently having so much difficulty in obtaining rates clearance certificates that the Johannesburg Attorneys Association is considering taking the municipality to court in an effort to get the issue resolved. While it has been reported that South Africa has escaped the worst of the recession, a number of property owners have been severely affected by the downturn. Sellers, in an attempt to avoid losing their homes have dropped their prices and buyers, it seems, are slowly, but surely taking the bait, breathing life back into a stagnant market. However, this will have little effect if transfers are not going through. The cost of the delays is reportedly in the millions and once again, estate agents and others who earn a living trading in real estate are bearing the brunt. Kgamanyane Maphologela, the deputy director of customer communications finally broke the silence recently and issued a general statement. He said the City of Johannesburg was in the process of introducing new processes to ensure sound solutions for ratepayer’s and customer’s problems. According to Maphologela, the centre of these changes is the implementation of a new internal system for the integration of all information. The initiative, he said, was aimed at improving the city’s revenue management and elevating the standards of service delivery within the revenue and customer relations departments. He attributes some of the delays to the actions of homeowners themselves, saying that rates clearance certificates will not be issued if there are outstanding amounts owed to the municipality. Other instances where the issuing of clearance certificates will be delayed are:

  • The city valuations and assessment departments have not valued the property;

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Refuse charges were not previously levied;

  • There have been no sewer, water or electricity charges;

  • +

Rates and other charges are overdue.

Maphologela acknowledged receiving a query from the JAA with regard with the backlog in clearance certificates. He summarises the city’s position as follows: “To put issues into context, the City does not have a backlog of 40 000 clearances certificates as was recently claimed in the media. The allegations are factually incorrect, defamatory, and deliberately spread malicious untested stories on the City. For the year July 2009 to date the City received 40 002 clearance applications. About 33 987 of these applications were issued within 30 days of application. To date there are approximately 2 000 clearance applications outstanding which is not beyond the trend. About 2000 of clearance applications outstanding are delayed by outstanding figures from our service arms - Johannesburg Water, City Power, Pikitup, Valuations and Rates and Taxes. One account may require input from one, a few or all the said partners.” Anton Theron, the acting chairman of the JAA disagrees, saying that the public is suffering as a result of the delays. “From the reports of our members it is clear that all conveyancing firms are affected by the problem. In some cases firms are sitting with transfers worth several hundreds of millions of Rand ready to be lodged for registration but cannot do so because they cannot obtain clearances.” He says the JAA is watching the situation very carefully and legal action, although undesired, is not excluded. “Many members of the JAA have already started with legal action on behalf of clients and in some cases have already obtained Court Orders.” The impact on the property industry will be serious if the problems are not resolved soon. While the municipality may not believe the situation is critical, they may want to consider their own system in relation to the one being used in Cape Town where rates certificates are generally cleared within days. It seems strange that the citizens of Cape Town do not query their municipal bills or indeed default on payments for essential services to the same extent that the citizens of Johannesburg do. Perhaps the Johannesburg Municipality hasn’t yet heard the adage about the customer always being right? Article courtesy of , and is taken from their July/August 2010 issue.

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