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Johannesburg - The backlog of outstanding municipal clearance certificates has soared to almost 45 000 because of the Johannesburg municipality's inability to process them, say players in the property industry.
This is heading for a crisis where property transactions worth billions are not being processed, leaving conveyancing attorneys, house sellers, buyers and property agents in the lurch.
Lew Geffen, chairperson of Lew Geffen Sotheby’s International Realty, describes the situation as a massive coronary for Johannesburg's economy.
He says his business’s cash flow is already 40% down from normal.
A clearance certificate serves as proof that property tax has been paid and is essential to finalise a property transfer at the Deeds Office. When a property changes hands the transferring attorney has to apply for a clearance certificate from the municipality. Without this, the deeds office will reject the transfer.
This issue has been dragging on for several months and clients who sold their houses in 2009 are still waiting for their property tax clearance figures in order to obtain a clearance certificate.
The process should normally take no longer than a couple of days.
The City Council of Johannesburg maintains that the backlog has resulted from a software problem because of the recent conversion to a new system.
Players in the property industry, however, claim that problems existed before the introduction of the new system.
Vered Estates managing director Jonny Novick says clearance certificates have always been issued with difficulty, largely because of a shortage of staff and probably a skills deficit.
He reckons the solution lies in companies in the private sector that operate in the property market, including banks and estate agencies, establishing an organisation to support the municipality in clearing the backlog as quickly as possible.
Martin Strydom, senior partner at attorneys Louw & Heyl, says his firm is sitting with at least 150 transactions where transfers cannot be submitted. Law firms, he observes, are being criticised by both buyers and sellers, but their hands are tied.
He reckons the municipality should consider privatising the issue of clearance certificates.
Two first-time home buyers, Anneli Groenewald and Janine Robberts, waited four-and-a-half months for their clearance certificate to be issued.
Although it was applied for on January 22 this year, it was issued only on June 7. Groenewald says that if everything had run smoothly the purchase would have been finalised by the end of March.
Because they had previously been renting and had not expected a delay with the certificates, they had given their landlord notice at the end of February.
The sellers had not been prepared to grant occupation before the transfer was complete, which had left the purchasers without accommodation for the past three months.
- Sake24.com
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