There are six steps in a property transaction:

• The offer to purchase, done through an estate agent;
• The registration of the bond, done through a conveyancing attorney or bank;
• The appointment of the conveyancing attorney;
• The clearance process, done through the municipality;
• The registration of deeds, done by the Deeds Office, or the Department of Agriculture and Land Affairs; and
• The transfer of ownership, done by the Deeds Office, or the Department of Agriculture and Land Affairs.

• Apply for municipal services if you are the buyer; and Close your services account if you are the seller.

Clearance Certificates

A KEY part of buying or selling property - as far as your interaction with the City is concerned - is the clearance process. As a property owner, you need to know that before you can sell your property you are legally required to get a Clearance Certificate from the municipality.

The seller is responsible for making sure that all rates and services have been paid and that the municipal account is up to date before selling the property. This is also the case if a tenant has leased the property. Sectional Title owners will receive their first rates account, under the new Municipal Property Rates Act, from 1 July 2008. In the past these accounts were sent to the bodies corporate. Like other property owners, sectional title owners will, therefore, need to apply for Clearance Certificates on assessment rates when selling their properties.

Once this is done a Clearance Certificate can be issued. This certificate shows that there are no outstanding municipal charges. The Deeds Office will only register the change in ownership once the Clearance Certificate has been received. The City processes up to 10 000 Clearance Certificates in any given month. It takes up to 30 days from the time the City receives your application, for your property to be cleared.

Account issues must be resolved and account arrears paid before your request for a Clearance Certificate will be accepted by the City. If you have an account problem, please log a query with Joburg Connect on 011 375 5555.

The clearance process

The appointed conveyancing attorney must apply for a Clearance Certificate from the City's Clearance Unit by filling in the required clearance application form. The seller, in turn, has to fill in a cancellation of consumer agreement form to have the water and electricity account finalised, and to apply for the deposit to be refunded. In the case of a tenant leasing the property, a cancellation of consumer agreement form must be completed by the tenant. All arrear amounts for the two years proceding the date of application on the owner and tenant accounts will be included in the clearance figures.

Once the Clearance Unit has verified all the information, the conveyancing attorney is informed of the clearance figures. This can take as little as five working days if there are no problems or queries on the account. The clearance figure is the final amount to be paid to settle the account before the City will issue the Clearance Certificate; the certificate indicates that no amount is outstanding on the account and that the account may be closed.

The conveyancer arranges for full and final payment of the account, either in cash or with an attorney trust cheque. The Clearance Certificate is issued within 24 hours of payment and is valid for 120 days. If the sale of property is delayed over the 120 days, the conveyancer has to re-apply for a certificate. 

Disputes on clearance amountsIf you disagree with the clearance amount on your account you must log a query with Joburg Connect on 011 375 5555. Once your query is resolved you can re-submit your application for a Clearance Certificate. 

Sectional Title property owners

A separate Clearance Certificate should also be requested by the body corporate for services accounts. This is because more than one unit is on the property and water and electricity is usually consumed through a bulk meter rather than individual meters. The application must be made by the existing account holder, which could be the body corporate or homeowners' association. It remains the responsibility of the body corporate or homeowners' association to ensure outstanding monies on services are paid. 

Developers of Sectional Titles

When a Sectional Title scheme is registered at the Deeds Office, a rates account is automatically opened at the City of Johannesburg.  To install new water or sewer connections, go to Joburg Water at Argent House, 21 Loveday Street, Marshalltown, in the CBD to fill in the application form. The same should be done for electricity connections. Go to City Power at 40 Heronmere Road, Reuven.  In both instances an official will visit the property before giving a quote on a connection fee.Applying for a Clearance Certificate on a Sectional Title property is different from the process for a freehold property. From 1 July 2008, holders of Sectional Title properties will receive individual property rates accounts, and they will, therefore, be expected to apply for a Clearance Certificate individually and not through their body corporate. 

 
Opening an account

ONCE you have bought your property, you will have to apply for the municipal services to your property to be put into your name. Go to your nearest Customer Service Centre and Complete the Application for the Supply of Water and Electricity contract. Remember, you will need to pay a deposit of two months estimated consumption for local residents and six months for foreigners.  Rates accounts will automatically be created in your name, as the new property owner, as soon as transfer is registered at the Deeds Office.

Documents required with the application:

• Applicant's identity document;
• Copy of owner's ID if the applicant is a tenant;
• Spouse's details and ID;
• Spouse's employer details;
• Next of kin details;
• Bank account details;
• Monthly income; and
• Meter readings and numbers.

If you are applying in the name of a business, a body corporate, or a tenant, additional information is needed:

• Founding statement for a close corporation or trust;
• Certificate of establishment of a body corporate;
• Company registration number;
• Company letterhead and authorised signatory details;
• Lease agreement in the case of a tenant; and
• Offer to purchase if transfer of ownership is not yet registered.

Before buying a sectional title, ensure that all service charges are paid in full by the body corporate or find out if the services to the unit you are buying are rendered individually.

Deposits

ALL new accounts will be charged a deposit equal to the average consumption of two months' services. Deemed consumption is taken on the history of the previous owner's account, or in the case of a new dwelling, on the township average. Some people will, therefore, pay a larger deposit than others to open their account.

Deemed consumption will be averaged on new accounts over the first six months and thereafter they will be automatically regulated. The City will adjust the deposit and reflect it on the account as either a credit or a debit. Foreigners are required to pay a deposit of six months' deemed consumption.

Credit checks

The City implemented new credit control and debt collection by-laws in 2006.  Credit checks are now done on all new account applications. No person or company will be denied the right to open an account to receive basic water and electricity services, or to be billed for rates.  However, the City can request additional guarantees over and above the deposit, to cover the assumed risk.

Property developments

There has been huge growth in property development in Johannesburg over the past few years. While this is a positive reflection on the economy, it does present the City with certain challenges.  We have put together a checklist of questions to ask if you are planning to buy into a new development, or if you are planning a new development. This information will help you to make an informed decision - and even save you time and money later on.

For buyers

• Have the planning rights been approved by the City's Development Planning and Urban Management department?
• Did the surveyor-general approve the diagrams for the development?
• Have building plans been approved for the development?
• If it is a township development, has the township register been opened?
• Is the township a proclaimed township?
• If it is not proclaimed, are the clauses that protect the buyer in terms of the relevant proclaimed legislation included in the contract?
• Does the developer have permission from the City to sell erven in the township development?
• Are all the services for the development installed?
• Has the City approved and granted clearances for the services?
• Has the developer paid all the contributions outstanding on the township?
• Has the developer complied with all the conditions relating to the development?
• Has the City granted clearance for the transfer of erven from the township?
• If building plans have been approved and the building has been built, has the City issued a Certificate of Occupancy?

For developers

A large number of applications are returned because the City has no notification of the existence of the new development. By ensuring that all the relevant information is provided when you make your application for Clearance Certificates for new developments or townships, you are assured of a quick response.In each case it is recommended that you provide written proof of the actions.  This information is required for developers to receive all certificates (section 64 and 82, a Clearance Certificate for less formal township establishment, and a Clearance Certificate in terms of the development facilitation):

• Has building started?
• Have building plans been submitted to the City's Building Plans department for approval?
• Have the building plans been approved?
• Do you have a water connection on your site?
• Provide proof of payment for the installation of the water connection.
• Provide the water account number.
• Do you have an electricity connection on your site?
• Provide proof of payments for installation of the electricity connection.
• Provide the electricity account number.
• List the date of submission of building plans.

This is the specific information required to receive a Clearance Certificate for less formal township establishments (Act 113 of 1991):

• Has there been an official provincial government notice proclaiming that erven may be sold?
• What was the date of the government notice?
• What was the date of submission of building plans?
• What was the date of approval of building plans?

This is the specific information required to receive a Clearance Certificate in terms of the Development Facilitation Act (Act 67 of 1995):

• Proclamation notice.
• Section 38 certificate.
• Date of submission of building plans.
• Date of approval of building plans.

Certificate of Occupancy

The City has to issue a Certificate of Occupancy for every building that is built, before it is occupied, as required by the National Building Regulations (NBR) and Building Standards Act. This is to show that all requirements have been met and safeguards the owner or tenant.

The Certificate of Occupancy stipulates the type of dwelling - single dwelling, cluster complex, townhouse or complex - and is important if you wish to apply for a residential rebate.  The responsibility for obtaining a Certificate of Occupancy lies with the property owner and should be obtained at the time of taking ownership of the property.  A Certificate of Occupancy is also necessary before water and electricity deposits can be accepted for newly built properties.  All information taken off the City of Jo'burg website: www.joburg.org.za