ConCourt ruling on homeowner debt does not affect City

City of Johannesburg says it has an effective credit control system that protects the buyer. Photo: File

The recent Constitutional Court ruling that municipalities can no longer hold new homeowners liable for previous owners’ unpaid rates and taxes, does not affect the City of Johannesburg.

The City already has effective credit control systems in place to protect the rights of new property buyers. The City’s Group Finance spokesperson Kgamanyane Maphologela said the current model already allows the City to collect outstanding shortfall amounts from the seller without impacting the rights of the new property owner.

“A specialised firm of attorneys and consultants has been roped in to ensure that all collections are concluded before the property is transferred from the seller to the buyer,” said Maphologela.

The City has a strict mandate to collect all outstanding debts on a property when it is sold, added Maphologela. The recent ruling protects the rights of the buyer. Previously, new homeowners could be held liable for any debt on the property or services.

“The judgment seeks to protect the interests of the buyer. After the clearance figures have been paid and the clearance certificate issued, the buyer can now assume ownership of the property after the transfer, without being responsible for the outstanding [debt] incurred by the seller.”

New homeowners can check outstanding debt on the property before buying. They can obtain the seller’s municipal statement if they have a valid offer to purchase signed by all parties involved. The buyer can also request a copy of the clearance certificate from the transfer attorneys before entering into the contract. The clearance certificate shows both the clearance figures as well as the full outstanding amount, Maphologela said.

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