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Who Pays for the Levy Clearance Certificate in South Africa

  • Writer: Jonker Vorster Attorneys
    Jonker Vorster Attorneys
  • Sep 9
  • 5 min read

TL;DR

In South Africa, the seller is responsible for paying for the levy clearance certificate when transferring a property. This certificate confirms that all levies, interest, and related charges are fully paid, ensuring the property can legally transfer without any financial liabilities for the new owner. Costs may include arrears, interest, legal fees, and advance contributions, and must be settled before the certificate is issued. The purchaser only contributes if explicitly agreed in writing.


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When selling a property in a sectional title scheme or community estate, obtaining a levy clearance certificate is a critical step. This certificate confirms that all levies, interest, and contributions are up to date, ensuring that the buyer receives the property free of historical debt.


Many sellers and buyers ask the same question: who pays for the levy clearance certificate? Understanding this is crucial because, without the certificate, the transfer of the property cannot legally occur.


In this article, we explain the process, break down costs, provide actionable guidance, and answer frequently asked questions about levy clearance certificates in South Africa.


What is a Levy Clearance Certificate?

A levy clearance certificate is an official document issued by the managing agents, body corporate, or homeowners’ association. It verifies that:

  • All levies owed by the seller are fully paid.

  • Any penalties or interest for late payments are settled.

  • Advance contributions for the coming months are accounted for, if required.


Without this certificate, the conveyancer cannot register the property transfer at the Deeds Office. It acts as a safeguard for the buyer, ensuring they are not liable for debts incurred by the previous owner.


Why is a Levy Clearance Certificate Required?

The levy clearance certificate is legally required to protect all parties involved:

  • Buyer Protection: Ensures the purchaser does not inherit arrears or additional costs.

  • Financial Security of the Scheme: Protects the body corporate or homeowners’ association from unpaid levies.

  • Compliance: It is a legal requirement under the Sectional Titles Act, which mandates that no transfer can take place without a valid certificate.


A property cannot legally change hands without this certificate, making it a non-negotiable step in the sale process.


Who Pays for Levy Clearance Certificate?

Standard Rule: The Seller Pays

  • Sellers are primarily responsible for paying the certificate costs.

  • These costs include outstanding levies, penalty interest, legal fees, and sometimes advance levies for 3–6 months.

  • Managing agents typically require full settlement before issuing the certificate, which ensures the scheme’s financial stability and smooth transfer.


Why the Seller Pays

The rationale is simple: the levies were incurred during the seller’s period of ownership. Buyers should receive the property free of historical financial obligations, and the scheme must be reimbursed for services already provided.


Without full payment from the seller, the certificate will not be issued, and the transfer will be delayed or blocked.


When the Purchaser Might Contribute

While rare, in some cases, the purchaser may agree to cover certain arrears. This usually happens if:

  • The arrears are large and affect the purchase price negotiations.

  • The seller is unable to pay upfront, and both parties agree on an arrangement.


Such agreements must be clearly documented in the sale agreement. Even then, it is standard practice for the seller to bear the majority of the costs.


How Much Does a Levy Clearance Certificate Cost?

Costs vary depending on the scheme, outstanding amounts, and legal complexities. Typical components include:

  • Outstanding levies: any unpaid monthly contributions.

  • Special levies: contributions for specific projects or repairs.

  • Interest or penalties: charged on late payments.

  • Legal fees: if arrears have been handed over to attorneys for collection.

  • Advance contributions: 3–6 months of levies paid upfront for the buyer’s benefit.


For example, if a property has two months of unpaid levies totaling R4,000, a penalty interest of R200, legal fees of R500, and 3 months’ advance contributions of R6,000, the total levy clearance cost would be R10,700.


Managing agents reconcile the payment after transfer, and any excess is refunded to the seller.


Step-by-Step Guide to Obtaining a Levy Clearance Certificate

Flowchart titled Streamlining Property Transfer with Levy Clearance. Steps include requesting a certificate, payments, registration, refund.
  1. Request the Certificate: The seller’s conveyancer or agent formally requests the certificate from the managing agent.

  2. Account Reconciliation: The managing agent calculates arrears, interest, and required advance levies.

  3. Payment of Outstanding Amounts: The seller pays the calculated amount.

  4. Certificate Issuance: Once payment is received, the managing agent issues the levy clearance certificate.

  5. Transfer Registration: The certificate is submitted to the conveyancer for registration at the Deeds Office.

  6. Refund (if applicable): Any excess advance levies are refunded to the seller after transfer.


Following this structured approach ensures a smooth transfer and prevents unnecessary delays.


Legal Framework Governing Levy Clearance

Several laws regulate levy clearance certificates:

  • Sectional Titles Act: Mandates clearance before property transfer.

  • Community Schemes Ombud Service (CSOS) Act: Provides guidelines for resolving disputes related to levies.

  • Case Law & Managing Agent Practices: Establish that advance contributions and legal fees are enforceable and must be settled before transfer.


By understanding these legal obligations, sellers and trustees can navigate the process efficiently and avoid disputes.


FAQs About Who Pays for Levy Clearance Certificate

Who is legally responsible for the levy clearance certificate?

The seller is legally responsible for paying the certificate and settling all outstanding levies before transfer.

Can the purchaser pay instead?

Yes, but only if both parties agree in writing. This is uncommon and usually part of a negotiation when arrears are large.

Why do sellers have to pay months in advance?

Managing agents require 3–6 months’ advance levies to ensure the scheme’s financial stability and to cover services after transfer.

What happens if the seller cannot afford to pay?

The transfer cannot proceed until the levies are settled. In exceptional cases, the purchaser may contribute, or the arrears may be deducted from the sale proceeds under agreement.

Are legal fees included?

Yes. Any legal fees incurred to collect arrears must be paid before the certificate is issued.

Can arrears affect the sale?

Absolutely. If levies remain unpaid, the certificate cannot be issued, blocking the transfer and potentially affecting the closing date and buyer’s financing.

How long does it take to obtain a certificate?

Depending on the scheme and complexity of arrears, it can take a few days to several weeks, particularly if legal involvement is needed.


Conclusion on Levy Clearance Certificate Payment

The answer to who pays for levy clearance certificate is clear: it is the seller’s responsibility. Paying ensures buyers receive the property free from debt, and the scheme’s finances remain secure. Advance levies, arrears, and legal costs are standard parts of the process.


Jonker Vorster Attorneys helps sellers, buyers, and trustees navigate levy clearance efficiently, ensuring smooth, compliant property transfers without unnecessary delays or disputes.


Need clarity on levy clearance certificates? Contact Jonker Vorster Attorneys for expert property law advice. Hendre Vorster: hendre@jvattorneys.co.za

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