The eThekwini eThekwini Municipality is introducing a new automated and streamlined system for the issuing of rates clearance certificates.
This comes after local and global institutions flagged the current process as a major concern when doing business in eThekwini.
The City revealed its plan for a new system during a council meeting last week. It also announced tariff increases for the processing of rates clearance certificates.
The delayed issuing of rates clearance certificates has been a source of frustration for many in the property sector, who said they have had to wait months for the certificates to be issued.
The rates clearance certificate is an important document when completing a property transaction and confirms that all debt has been settled by the previous owner so the buyer starts on a clean slate.
When “The Mercury” previously reported on the delays, the City had given an assurance that it was attending to the matter.
Describing the proposed system, a report by the City said the World Bank and National Treasury had conducted a study on “Doing Business in South Africa” and one of the areas investigated was the issuing of the revenue (rates) clearance certificates.
In this regard, eThekwini Municipality did not fare well among the other metros in the country and a strategy to improve was suggested. The report said it was proposed that a new streamlined system be introduced that would automate some of the processes to improve customer service.
The new streamlined system is expected to be implemented during the 2024/25 financial year.
“The Mercury” understands from councillors that the aim is to make the system as paperless as possible with the application being made online and with the relevant departments (rates, electricity and water) having insight and the applicant being able to monitor progress.
One department would thus not be reliant on the other to attend to their “portion” of the application. It would also allow the others to see the progress.
Some estate agents said they were aware of the system and said it was meant to have been implemented months ago but was delayed.
Detailing the tariffs increase for the certificates, the report said the review of the tariffs was due to the number of processes involved in the issuing of clearance certificates.
“It is noted that manual application requires certain human interventions, including manual checking for compliance, additional administration that is involved in rejections, capturing of information onto the system.”
The report said it was also noted that electronic applications by contrast eliminate many of the problems associated with manual applications, hence a higher charge for processing manual clearance applications must be applied.
It said the cost of processing an electronic application for a rates clearance certificate will be R264, including VAT, for properties below or equal to R185 000, and R424 including VAT for properties above R185 000 in value.
The cost of processing a manual application for a rates clearance certificate will be R535 including VAT for properties below or equal to R185 000 and at R799 including VAT for properties above R185 000 in value.
The cost of processing a manual application with the new system in place will be R968 including VAT for any application submitted through conveyancers.
Speaking on the situation, one estate agent, said the delays were ongoing. Shakilla Sukhan, principal at Shanel Real Estates, said the average waiting period for a rates clearance certificate was around two months or more.
“This is creating such financial constraints to the agent, purchaser and seller plus the entire process of registration of transfer cannot be determined like it used to in the past,” she said.
Speaking on the tariffs increase, she said: “In all fairness, the system is clearly not working. How could they implement higher tariffs for an operation that’s failed? It’s all about the money with no service delivery once again. We work so hard as agents to achieve but the transfer process fails us.”
Another agent, who did not want to be named for fear of reprisals, said she was aware of the proposed system, adding that it should have been in place from December.
She said some certificates could take up to six months to be issued.
“It’s really bad, the market is depressed and then we wait for transfers.
We can’t pay our bills, budget or work on expected dates.”
She said the tariff increases were “very high” considering there was “no decent service”.
DA councillor Andre Beetge said, “Things are definitely not right in the department (which deals with the certificates), as it’s a known fact that some officials did not process as much as one single application per month during 2023, yet took home a full salary every month.”
ActionSA councillor Zwakele Mncwango said that the real estate sector was suffering.
“Why do you punish those who keep the economy of the city going, while they are trying to make a living? As ActionSA we will not support the tariff increases.”
ANC councillor Sifiso Mkhize said it was necessary to increase tariffs to ensure the City was generating sufficient revenue.
“When there is no money, there are complaints that we do not collect revenue, when we do, they (opposition) are the first ones to complain.”
The Mercury