Refunds after Transfers

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Refunds after transfers

We collect the money due to you by the City of Johannesburg

Before sellers of properties transfer their properties, they pay rates clearance figures in advance.  These amounts are overstated.  When the transfer is registered, the amount overpaid must be refunded to the Seller’s attorney’s trust account. 

Our service herewith includes:
1. See that all necessary and prescribed documents are submitted to the City of Johannesburg. These documents are:
ID of the Seller.
Power of attorney authorizing us to deal with the matter.
If the Seller is a company, the CIPC confirms that he is the company’s director.
A letter from the transferring attorney confirming the date of transfer with the instruction that the refund must be paid to their trust account.
The clearance figures issued by the Council.
Proof of payment of the clearance figures
If there were payments to Council after the date of transfer, a bank-stamped proof of payment.
The account and pin numbers of all accounts must be dealt with.
2. All deposits held by the Council, must be placed to the credit of the Seller’s account.
3. Stop the billing of Assessment rates, water, sewer, electricity, and refuse as at the date of registration of transfer.
4. Close the Seller’s account as of the date of transfer.
5. See that the refund is correctly calculated.
6. Ensure the refund is paid to the Seller’s attorney’s trust account.

Why is refunds after transfer of property of a property important to a Seller?

When the Council calculate the amount to be paid for clearance figures, they calculate the amount due PLUS 4 MONTHS IN ADVANCE. If the transfer is registered before the expiry of the 4 months, the portion of the debits for the unexpired portion must be refunded. The Council close the Seller’s accounts as on the date of registration of transfer. The Seller must apply for the refund and it is paid to the trust account of the transferring attorney.

Why would I be entitled to a refund after a property transfer?

The Seller is entitled to the refund.

Who is responsible for processing refunds after the property transfer?

The Council is responsible to calculate the refund due to the Seller.

What types of fees or payments are refundable?

Al monies in credit, after debiting the correct debits as on the date of registration of transfer, must be refunded.

How long does it take to process a municipal refund after a property transfer?

After registration of transfer, the Seller’s accounts are closed and the Purchaser’s accounts are opened and services are linked to the rates account. This takes between 2 to 3 months to finalise. If all the correct documents are submitted, the refund is paid to the transferring attorney within about 6 weeks.

The payment of refunds may be delayed of the refund is in excess of R500 000,00 or R1 million as payment then require approval of management.

What documents are required to claim a municipal refund?

The following documents are required by Council to process a refund after registration of transfer:
1. Power of attorney to act on behalf of the previous owner.
2. Certified copy of ID of owner.
3. Letter from transferring attorney confirming date of registration of transfer and a request that the refund must be paid to their trust account.
4. Copy of the Seller’s council account, indicating the account and pin number of the account.
5. Rates clearance figures.
6. Proof of payment of rates clearance figres.

Who initiates the refund process for overpaid municipal accounts?

The Seller, or Refundsman, can initiate the process to request payment of the refund.

What is the process to obtain the refund after transfer?

Refundsman, on behalf of the Seller, obtains the documents required to request the refund. They then wait till Council open the Rates account of the Purchaser. They the log a query with Council to
1. Close the accounts of the Seller as on the date of registration of transfer
2. Link the services to the Purchaser’s rates account with effect from the date of registration of transfer.
3. Pay the refund due to the Seller to the transferring attorney.

Does the refund cover prepaid electricity balances?

No. The monies available on the prepaid electricity meter will not be refunded and must be resolved between the Seller and Purchaser.

Can refunds be disputed if the amount seems incorrect?

If the Seller or the Purchaser dispute the finalisation of the accounts, the best will be to address the query for finalisation by Refundsman.

Are refunds subject to deductions or penalties?

No. No fees are due to Council to determine, or pay, the refund.

Deposits and Advances

Will I receive a refund for my deposits and advance payments to Council?

When the account of the Seller is finalised, the Municipality credit the Seller’s account with the deposits released. This credit is then refunded to the transferring attorney.

Buyer-Seller Agreements

What happens to the Council accounts if the Purchaser moves into the property prior to registration of transfer?
In terms of the Agreement of Sale, the Purchaser should pay occupational rental. The agreement will also specify for which Council expenses the Purchaser will be liable from date of occupation to date of registration of transfer. This accounting is a matter between the Seller and Purchaser. The Council does not involve in this transactions.

The same arrangement applies f the Seller remains in occupation of the property after registration of transfer of the property.

Does the Buyer reimburse the Seller for overpaid municipal rates?

No. The Council finalise the accounts as on the date of registration of transfer. If the date of registration of transfer differ from the date of occupation, the parties may have to apportion the Council debits.

How do I check the status of my refund after the transfer?

Refundsman will follow up with Council if the refund is settled. If you receive an invoice with a debit mark “Refund paid” the refund is settled to the trust account of the transferring attorney.

What should I do if my refund request is denied?

If the payment of the refund is denied, you will have to determine the reason for the denial. Refundsman will assist you to address all queries with Council.

Are there any deadlines for claiming a refund after the property transfer?

A claim for a refund prescribe after 3 years. In good faith, Council accommodate prescribed claims.

How can I expedite the refund process after the property is transferred?

Refundsman expedite refund claims with Council. They do this by
1. Submission of all required documents when they apply for the refund as the Council does not process any refund request if the required documents are not submitted.
2. Follow up if the Seller’s accounts are closed and the services linked to the Purchaser’s accounts.
3. See if the refund is paid timeously in terms of the Service Level Agreement.
4. If the refund is not settled timeously, escalate the query to management.

Can I get a refund for overpaid levies in sectional title properties?

Levies of Sectional Title units are not refunded by Council but it is refunded by the Managing Agent of the scheme.

How are refunds managed for deceased estates or inherited properties?

Refunds are paid to the transferring attorney who must pay the party entitled thereto.

Are refunds applicable for auctioned or repossessed properties?

If clearance figures are paid n terms of Section 118, it may mean that not all the Council debt is paid. No refund will then be due by Council. If there care moneys to be refunded, the refund will be paid to the transferring attorney who must pay the party entitled thereto.

Can refunds be issued directly to my bank account?

Refunds, after a transfer of a property, must be paid to the transferring attorney. It may not be paid directly into the Seller’s bank account.

Are refunds transferable to another property I own?

Yes. If the letter from the transferring attorney specify that the refund must be transferred to another account of the Seller, it may be done provided that the clients on both accounts are exactly the same.

What happens to the refund if I owe money on another municipal account?
The Council may transfer moneys from the account in credit to the account in debit provided that the names on both accounts are exactly the same.

064 898 6874

Refunds after transfers
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