The section 15B clearance certificate is the body corporate’s last line of defence when a unit is sold. Get the figure right and the arrears are paid from the sale proceeds. Get it wrong and the shortfall usually becomes a difficult claim against a former owner.
Why the certificate matters
Section 15B(3) of the Sectional Titles Act 95 of 1986 prevents registration of the transfer of a unit until the conveyancer certifies that the body corporate has confirmed that all moneys due to it by the seller have been paid, or that satisfactory provision has been made. Until then, the transfer cannot proceed, which gives the scheme real leverage.
The trustees’ checklist
- Levies to the transfer date. Include ordinary and special levies up to the expected date of registration, not just to the end of the current month.
- Interest. Include interest on arrears at the rate allowed by the scheme’s rules.
- Legal costs. Where an account has been handed over, include the legal costs recoverable from the owner. Ask your attorneys for an up-to-date figure before the certificate is issued.
- Other charges. Include other amounts due to the body corporate in respect of the unit, such as utility recoveries where the scheme bills them.
- Validity period. Issue the certificate for a defined period and require a new one if transfer is delayed beyond it.
Common mistakes
The most common errors are issuing figures only to month-end when transfer is weeks away, leaving out legal costs on handed-over accounts, and not updating figures when transfer is delayed. Each of these leaves money behind.
Where the account is with attorneys
If the account has been handed over, the managing agent should always confirm the outstanding balance and costs with the attorneys before issuing the certificate. We provide clearance figures promptly on request, so the transfer is not delayed.
Homeowners’ associations
Many estates require the HOA’s clearance before transfer in terms of their constitution or title conditions. The same checklist applies.
This article is general information, not legal advice. Contact us about your scheme’s circumstances.