Section 118 (1) (2) (3) of The Municipal Systems Act 32 of 2000

WHAT IS THE INFAMOUS SECTION 118 ALL ABOUT

Restraint Of Transfer On Property:

118 (1) A registrar of deeds may not register the transfer of property except on production to that registrar of deeds of a prescribed certificate–

(a) issued by the municipality or municipalities in which that property is situated;

and

(b) which certifies that all amounts that became due in connection with that property for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certificate have been fully paid.

(2) In the case of the transfer of immovable property by a trustee of an insolvent
estate, the provisions of this section are subject to section 89 of the Insolvency Act, 1936 (Act No. 24 of 1936).

(3) An amount due for municipal service fees, surcharges on fees, property rates and
other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is against the property.

Here are a few Simplified Explanations of how it all works:

What is The Municipal Systems Act 32 Of 2000?

The Municipal Systems Act 32 of 2000 is a South African law that governs how Municipalities manage property-related debts and the transfer of property ownership. It establishes the rules for obtaining Certificates and clearing Municipal Debts, ensuring a smooth property transfer process.

 

Before Transferring Property:

To officially transfer ownership of a property, you need a Certificate from the Municipality. This Certificate confirms that all Municipal bills, such as water, electricity, and property rates, have been paid for the last two years. This step is essential for the property transfer to be officially recorded.

Outstanding Debts:

Any unpaid Municipal charges are tied to the property and must be cleared before the transfer can be completed. These debts take priority and preference over any mortgage or loan on the property.

 

Peace of Mind: the Municipal Debt Specialist

While obtaining a Certificate from the Municipality confirms that Municipal charges for the past two years have been paid, it’s essential to consider Municipal Debts beyond this period for complete peace of mind. Whether you’re involved in repossessions, liquidations, auctions, or standard property sales, historical Municipal Debts can pose potential risks if not properly addressed.

At Municipal Debt Specialist, we don’t just stop at the Certificate. We conduct a comprehensive audit of all Municipal Debts, including those from previous years. Our experts work to negotiate reductions and resolve outstanding amounts, ensuring that all financial obligations tied to the property are cleared. This thorough approach not only safeguards your interests but also prevents future complications for both buyers and sellers.

To ensure a smooth and hassle-free property transfer, contact us today. Let us provide the true peace of mind you deserve by managing and resolving all aspects of Municipal Debt, no matter the complexity of the transfer.

 

SECTION 118 IN SIMPLE TERMS:

Section 118 (1):

What It Means: When transferring property ownership (whether selling or changing ownership), you must obtain a Certificate from the local Municipality where the property is located. However, Municipal Debt Specialist goes a step further by interrogating these debts. We scrutinise the claimed amounts, negotiate reductions, and ensure that you are not overpaying, ultimately saving you money.

Certificate Details: This Certificate confirms that all Municipal bills (like water, electricity, and property rates) for the past two years have been fully paid.

Why It’s Required: The property transfer cannot be officially registered without this Certificate.

 

Section 118 (2):

What It Means: Section 118(2) relates to historical debts that may have accumulated on a property, especially in cases of insolvency, liquidation, or sequestration. These debts are separate from the two-year period covered by the Clearance Certificate under Section 118(1). Municipal Debt Specialist meticulously reviews these older debts and challenges any amounts that are not legally enforceable. By negotiating with the Municipality and leveraging our expertise in the Insolvency Act and related laws, we ensure that only legitimate debts are settled. This process prevents clients from overpaying on old and potentially inflated claims.

Protecting Your Interests: We thoroughly audit historical debts linked to the property, ensuring that any amounts outside the two-year Clearance Certificate period are justified and accurate. This proactive approach protects both buyers and sellers from unnecessary financial burdens related to outdated Municipal Debts.

 

Section 118 (3):

What It Means: Unpaid Municipal bills, such as property rates and taxes, are considered a debt attached to the property. These debts take precedence over any mortgage or loan on the property. However, Municipal Debt Specialist goes beyond just obtaining the Certificate for the last two years. We review and resolve older claims that may fall outside the two-year period. Our team meticulously examines these debts, ensuring that all amounts claimed by the Municipality are legitimate. We then negotiate reductions on any inflated or incorrect charges, providing a more comprehensive resolution that saves you money and prevents future legal issues.

Priority of Debt: Any outstanding Municipal Debts should be cleared before the property can be transferred or any mortgage claims enforced. Therefore, it’s crucial to address not only the Clearance Figures for obtaining a Clearance Certificate but also to resolve these debts after verifying the amounts claimed.

 

Your Trusted Partner for Seamless Property Transfers and High Clearance Figures Debt Resolution

In summary, Municipal Debt Specialist ensures a smooth property transfer by not only addressing current Municipal charges but also resolving any past debts. Our expert team handles everything with a risk-free, no-win-no-fee approach, so you only pay if we achieve savings. We’ve achieved significant victories in court, reinforcing our commitment to protecting your interests.

 

Discover More About Our Expertise and Success:

• For more information about our services or to discuss your needs, please Contact Us.
• Our team is ready to offer expert support and ensure a smooth, efficient property transfer process.
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