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Court case on rates payments upon transfer of property

A recent court judgement is of interest to executors and trustees selling immovable property from deceased estates or trusts.  In the case of Nelson Mandela Bay Municipality v Amber Mountain Investments [2017] ZASCA 36, the municipality had a policy in 2009 that before rates clearance certificates will be issued to sellers of immovable property, full payment must be made for the rates applicable for the full year during which the sale takes place.  The rates clearance certificate is required before the Registrar of Deeds will process the transfer of the property.

The Supreme Court of Appeals ruled that this policy is inconsistent with existing legislation and therefore invalid.  A municipality is only entitled to demand the rates for the relevant year up to the date of transfer.  The case is important as it sets out the provisions of the legislation applicable and reiterates the principle that any action taken by any authority in South Africa must be legal and rational.

Click here to read the full judgement.

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