City of Cape Town v Real People Housing (Pty) Ltd

Real People Housing (Pty) Ltd owned and sold various properties in Cape Town and sought to transfer them to purchasers. To effect transfer, s 118(1) of the Local Government: Municipal Systems Act 32 of 2000 requires a municipal clearance certificate confirming payment of municipal debts incurred in the two years preceding the application. The City of Cape Town alleged that municipal service debts were outstanding, some older than two years, and refused to issue clearance certificates unless all historical debts were paid. Relying on its credit control policy, the City allocated any payments to the oldest debts, effectively preventing clearance unless all arrears were settled. Real People Housing disputed liability for some debts (incurred by occupiers) but tendered payment of debts incurred in the preceding two years only. The City refused to provide itemised details of those amounts or to issue certificates on that basis.

The appeal was dismissed with costs. The High Court orders declaring the City obliged to provide itemised details of two-year debts and to issue a clearance certificate upon payment of those amounts were upheld.

The case authoritatively clarifies the scope of s 118(1) of the Municipal Systems Act, confirming that municipalities may not withhold clearance certificates to enforce payment of debts older than two years. It limits municipal power to block property transfers, reinforces strict statutory interpretation where property rights are affected, and ensures certainty for conveyancing practice across South Africa.