Can a Body Corporate Withhold Clearance Certificates?

It has become a common issue for body corporates to withhold levy clearance certificates if an owner is accused of breaking the rules, even when all fees are paid. This causes frustration, especially when the owner wants to sell the unit quickly.

What is a levy clearance certificate?

A levy clearance certificate is a document that confirms all the money owed to the body corporate by the seller has been paid. Without this certificate, the transfer of the property cannot be registered at the deeds office. The Registrar of Deeds will not register the sale of the property without a conveyancer's certificate, which is based on the levy clearance certificate issued under Section 15B(3) of the Sectional Titles Act 95 of 1986.

The issue with withholding certificates

In practice, conveyancers get the levy clearance certificate from the body corporate to sign the necessary documents for the sale. However, body corporates sometimes refuse to issue these certificates if there are alleged rule violations, even when all fees are paid. This can delay the sale and pressure the owner to comply with demands unrelated to financial obligations.

Legal response

In response to these issues, the Law Society of South Africa sent a letter in 2011 to the National Association of Managing Agents, stating that withholding levy clearance certificates for reasons other than unpaid levies is illegal.

Court ruling

Despite this, some body corporates continued the practice. Fortunately, the High Court ruled that body corporates cannot withhold levy clearance certificates to enforce compliance with rules if all fees are paid. The court emphasised that the purpose of Section 15B(3) is to ensure financial stability of the scheme, not to enforce rule compliance.

In closing

If an owner has paid all the money owed to the body corporate, the body corporate is legally required to issue the levy clearance certificate. They cannot withhold it for alleged rule violations. This ruling protects property owners from being unfairly pressured and ensures that the sale process can proceed smoothly. If a body corporate is refusing to issue your certificate despite zero arrears, escalate to the Community Schemes Ombud Service (CSOS) or consult an attorney.

Related Africa Estate guidance

• Body corporate and levies explained: full overview of how sectional title schemes are governed, including trustee duties and arrears recovery.
• Sectional title vs freehold: the differences that make levy clearance certificates relevant on sale.
• The residential transfer process explained: where the clearance certificate fits into the conveyancing sequence.

Selling a sectional title unit and the body corporate is delaying your clearance certificate? Contact Africa Estate. We coordinate with the managing agent and your conveyancer to resolve the delay so the sale can register on time.

This article is informational. The Sectional Titles Act 95 of 1986 (Section 15B(3)), the Sectional Titles Schemes Management Act 8 of 2011, and the Community Schemes Ombud Service Act 9 of 2011 govern levy clearance and body corporate disputes. Always consult a qualified attorney for advice on a specific dispute.