Unexpected Costs for Sellers in Property Transactions: What You Need to Know

Posted by J Naude Law | August 29, 2025

Introduction

Selling a property in South Africa is often seen as a straightforward process, but many sellers are unaware of the financial obligations that come with it. While buyers typically handle transfer duties and attorney fees, sellers face several unexpected costs during the conveyancing process. This blog post aims to shed light on these expenses, empowering you to plan effectively and avoid surprises when transferring your property.

Disclaimer

This non-academic article/blog post is for informational purposes only and does not constitute legal advice in any way, manner, or form. It is intended solely to provide general guidelines on some factors to consider related to the subject matter. The information contained herein reflects the legal position as of the date of publication. However, readers should note that the law and conveyancing practices are constantly evolving and subject to interpretation. As such, it is possible that other legal practitioners may hold different views from those expressed in this article.

Common Expenses Borne by Sellers

While not exhaustive, the following list outlines the most common costs that sellers encounter. These can vary depending on factors like the property’s location, outstanding debts, or ownership structure.

1. Rates Clearance Application Fee

Payable to the local municipality, this fee covers the administrative cost of applying for a rates clearance certificate. This document confirms that all municipal rates, taxes, and services (like water and electricity) are up to date. Without it, the transfer cannot proceed. The fee is usually a fixed amount but can add up if multiple applications are needed.

2. Rates Clearance Figures

Sellers must settle any outstanding municipal accounts, including rates and service charges, to obtain the clearance certificate. These figures can be significant if the account is in arrears. Additionally, the account typically needs to be paid 2 to 3 months in advance for clearance purposes, with a pro rata refund due to the seller after registration, depending on the date of transfer.

3. Bond Cancellation Fees

If a bond (mortgage) is registered over the property, the seller must pay for its cancellation. This includes attorney fees, which typically range from R4,500.00 to R7,500.00 (excluding VAT) per mortgage bond to be cancelled. If multiple bonds are registered over the property, a cancellation fee is payable for each bond. Banks often appoint their own attorneys for this process, separate from the transfer.

4. Levy Clearance Fees

For properties in sectional title schemes (like apartments or townhouses) or those governed by a Home Owners Association (HOA), a levy clearance certificate is required to confirm that all levies are paid. Sellers are responsible for any arrears and the administrative fees charged by the body corporate or HOA for issuing the certificate.

5. FICA Compliance Fees

Under the Financial Intelligence Centre Act (FICA), the transferring attorney must verify the seller’s identity and compliance. Any costs associated with obtaining or verifying documentation are typically charged to the seller.

6. Replacement Title Deed (VA) Fees

If the original title deed is lost or damaged, a replacement must be obtained through a “VA” (application for a certified copy). This process incurs fees payable to the Deeds Office and the transferring attorney. Additionally, it requires the publication of certain advertisements in the area where the property is situated, which involves further costs. These steps can delay the transaction if not addressed early.

7. Compliance Certificates

Sellers are responsible for obtaining and paying for various compliance certificates, which are often required before a property transfer can be completed. These may include:

• Electrical Installation Certificate: Verifies that the property’s electrical systems comply with safety standards.

• Sewage Certificate: Required in certain areas, such as properties within the City of Cape Town municipality, to confirm compliance with sewage regulations.

• Gas Installation Certificate: Ensures that any gas installations meet safety requirements.

• Electric Fence Certificate: Confirms that electric fencing, if present, is compliant.

• Beetle Certificate: Required in some regions to verify that the property is free from wood-destroying beetles. Contractors must be appointed and paid by the seller to inspect the property and issue these certificates, with costs varying depending on the contractor and the property’s condition.

  
  

Conclusion

To ensure a smooth property sale, sellers should proactively prepare for these costs. Start by reviewing your municipal and bond statements to identify any arrears or outstanding amounts. Engaging a conveyancing attorney early in the process can provide clarity on the specific costs you’ll face and help streamline the transaction. By budgeting for these expenses and addressing potential issues upfront, you can avoid delays and achieve a successful property transfer.