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MCademy. “ I f you think education is expensive, try ignorance”. Legal issues pertaining • Building plans • Sectional plans • Zoning & property rights 24 April 2013. Multidisciplinary nature of problem. Legal. Town planning. Agent. Surveyor. City Council. Architect.

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i f you think education is expensive try ignorance

MCademy

“If you think education is expensive, try ignorance”

slide3

Legal issues pertaining

    • •Building plans
    • • Sectional plans
    • • Zoning & property rights
    • 24 April 2013
slide4

Multidisciplinary nature of problem

Legal

Town planning

Agent

Surveyor

City

Council

Architect

slide5

Multidisciplinary nature

Property law is complex

Architects

Surveyors

Work together Town planners

Conveyancers

Agents

slide6

Purpose of seminar

1. Hear from experts – other fields

2. Answers on FAQ

3. Give direction future

sonja du toit
Sonja du Toit

Skills & Expertise

Conveyancing

Property Law

Commercial Contracts

Sectional Title Development

Township Establishment

Notarial Work

Education

University of Pretoria

LLB (Cum Laude), 1999 - 2000

University of Pretoria

BLC (Cum Laude), 1996 - 1998

Director at M.C. van der Berg Incorporated

Attorney, Conveyancer & Notary

slide9

1. How did sectional titles originate?

2. Differences between sectional title and full title

3. Opening of a sectional title scheme

4. Terminology

5. Extension, subdivision and consolidation of a unit

slide10

1. How did sectional titles originate?

  • Definition of property ito common law:
      • - Ground
      • - Structures attached thereto
  • Shortcoming of the definition
      • - no ownership of “flat”
  • Solution to the problem
    • - Previously: share block schemes
      • - Sectional titles act
slide11

2. Differences between sectional title and full

title

Sectional title

Full title

  • Owner of the unit & undivided
  • share in common property
  • Body corporate –
  • all owners are members
  • Consent by body corporate,
  • building plans and new sectional
  • title plans for improvements
  • Rates & taxes and consumption
  • payable to local municipality
  • Owner of erf and structures
  • attached thereto
  • No body corporate
  • Can improve the property with
  • approved building plans
  • Rates & taxes and consumption
  • of water & electricity payable to
  • local municipality
slide13

Example:

93 ÷ 231 = 0,402597 x 100 = 40,2597

138 ÷ 231 = 0,597403 x 100 = 59,7403

If levies are R5 000 per month:

Unit 1 pays:

R5 000 x 40,2597% = R2 012,98

Unit 2 pays:

R5 000 x 59,7403% = R2 987,02

slide14

3. Opening of a sectional title scheme

  • • Sectional title plans
      • - drafted by surveyor
      • approved by surveyor general
  • • Application drafted by conveyancer
  • • Annexure 8 and 9 to sectional titles act: Rules
  • • Lodge at deeds office
  • • Separate titles: Certificate of registered sectional title
slide15

4. Terminology

Unit

Section

Common property

Exclusive use ( sect 27)

Right to extend

slide16

Unit:Section + undivided share in common property

  • Section = house
  • Common property: Areas surrounding unit
  • Exclusive use ( sect 27)
  • in terms of notarial in terms of rules
  • deed of exclusive use
  • Real rightcannot be bonded
  • can be bonded
slide17

Right to extend: addition of more units

      • -Developer
      • - On opening of scheme
      • - For a specified period
      • - Horizontally or vertically
slide18

5. Extension, subdivision &

consolidation of a unit

  • Extension of a unit (Usually problem with duets)
    • - In addition to building plans
    • - Consent body corporate
    • - Approved surveyor general plans
    • - Application to extend – conveyancer
    • - Letter by surveyor - 10% or less increase in
    • participation quota
    • - More than 10% - consent by all bondholders
    • - Effect on exclusive use areas
    • Simultaneously with transfer
    • Also possible to subdivide and consolidate units
slide19

Lydia Lewis

Skills & Expertise

Strategic Planning and Integrated Planning

Township Establishment Applications

Development Control applications

Development Investigations and Advice

Urban Renewal & Township Designs

Due Diligence studies / Property Audits

Education & Membership

University of Pretoria

B(TRP) 1991-1994

Professional Planner: South African Council for Town and Regional Planners (TRP(SA))

South African Planning Institute (SAPI)

South African Association of Consulting Professional Planners (SAACPlan)

Managing Member

of

Velocity Townplanning

&

Project Management

slide21

Introduction to town planning

Why Town Planning?

Spatial / Strategic Planning

Town Planning Schemes

Types of land use applications

Professions involved

Process

Applications

Land Development Requirements (LDR)

slide23

Introduction

Lydia Lewis

B(T&RP) UP, TRP (SA)

Member of: - The South African Council for Planners (SACPLAN)

- The South African Planning Institute (SAPI)

- South African Association of Consulting Professional Planners (SAACPP)

A broad overview of town planning, terminology, processes, land use management and other useful information.

slide25

Town and Regional Planning is the process of making decisions on the development and use of land. It is a tool for guiding and facilitating development and regeneration in a way that also preserves the best features of our environment.

  • Thus: What may happen where in the city, and how much of it.
slide27

Strategic planning,(forward planning)

    • - Regional Spatial Development Frameworks (RSDF)
  • - Local Development Frameworks (LDF)
  • - Spatial Development Plans (SDP).
  • Planning authorities use these documents to control development and determine planning applications.
  • Very important developing tool.
  • - Uses
  • - Densities, etc
  • Policies
  • Guest House, Creche, Commune, Second Dwelling, Home Office, etc.
  • Environmental
slide30

Land uses are managed by what are known as Town-planning schemes.

  • Each municipality has its own, unique Town-planning scheme
  • Tshwane is using The Tshwane Scheme of 2008.
  • Title Deeds
  • In addition to the zoning regulations, development is also controlled by conditions of title. These conditions are set out in the Title Deed of each property, and can restrict the way in which a property may be developed.
  • “The erf may not be subdivided, except in special circumstances, and with the written permission of the Administrator”.
  • “The erf may only be used for the purpose of a residential dwelling...”
slide31

Town Planning Schemes

  • (Land use management)
  • Residential 1
  • Residential 2
  • Business 1
  • Business 2
  • Business 3
  • Business 4
slide32

Types of land use applications

  • Township Application
  • Any property with the zoning of “agriculture” are subject to a township establishment application in terms of that area’s Town Planning Scheme
slide33

Professions involved

A land use application is a comprehensive action that includes critical information from many professional disciplines.

- Environmental consultant

- Land surveyor

- Electrical Engineer

- Civil Engineer

- Traffic Engineer

- Geotechnical Engineer

- Conveyancer

- Town Planner

slide34

Process

  • After all the information of the abovementioned professions became available, the TP can commence to design the plan. The layout plan is the end result of all information available.
slide35

Rezoning Application

    • - A rezoning application is basically when you want to change the zoning (use) of your current erf to a different zoning, or if you want to increase the bulk (fsr) or density of your property.
    • Done in terms of the Town Planning Ordinance, 1986.
  • In line with Spatial Framework?
  • Every individual erf has it’s own zoning
  • (no blanket zoning).
  • Timeline
  • Costs
slide36

Process (public participation, council circulation, external circulation)

  • Submission (including the Bondholder’s Consent).
  • Advertised in the Provincial Gazette and 2 other newspapers
  • for two consecutive weeks
  • Site notice is displayed on site for 14 days.
  • Period for objections is 28 days.
  • Application is distributed to the different departments of the
  • Municipality.
  • - Comment period is 60 days from submission.
  • The City Planning Division makes a recommendation which
  • is referred to the applicant for comments.
  • The application is approved and the amendment scheme is
  • promulgated in the Provincial Gazette
slide38

A rezoning application is subject to certain bulk services

  • Contributions payable to local authority.
  • Bulk services contributions can be regarded as taxes
    • levied by the local authority
    • for the increase in the capacity of the existing
        • storm water drainage
        • sewer system
        • water provision
        • electrical network
        • upgrading of roads
  • due to the rezoning application and is determined according to the area / ”bulk” of the new development.
  • From “Residental1” erf to “Business 4” erf = ± R100 000-00
slide39

Consent Use Application

  • When?
    • rezone
    • consent use application
  • Is not a permanent right.
  • A Consent Use application in terms of the relevant
  • Town Planning Scheme.
slide40

Removal of Restrictive Conditions Application

  • The importance of title conditions as development control measures has
  • diminished over the years
  • due to implementation of more effective & flexible policy documents & laws such as Town Planning Schemes and Municipal Ordinances.
  • - Building Lines
  • - Uses
  • - Building Materials, etc.
slide41

Subdivision Application

  • A subdivision application is done when you want to subdivide an existing erf into two or more parts.
  • Things you must consider when you want to subdivide:
  • - Density policy
  • - Restrictive conditions in the title deed
  • - Servitudes
  • Time & Costs
slide42

Consolidation Application

  • When you want to consolidate two or more portions with each other.
slide43

Things you must consider when you want to consolidate:

  • - Same rights
  • - Same owner
  • - In the same township
  • Notarial ties
  • Application
    • advertised in the press or on the property itself
    • the approval thereof is left to the discretion of the Council
  • - Section 38 process
slide44

Other Applications

  • Purchase of Council land
  • Second dwelling
  • Relaxation of building lines
  • Advertisements along the Provincial / Gautrans Roads Etc.
slide45

Land Development Requirements (LDR)

What is LDR’s?

The rules which you must oblige to in order to do a development on a specific site.

Specifically set out in every Town Planning Scheme

slide46

Includes the following:

  • Landuse
  • Coverage
  • Density
  • Floor Area Ratio or FAR (FSR)
  • Height
  • Parking Requirements
  • Building Lines
slide47

Eamon Swart

Skills & Expertise

Township Establishment

Sectional Title Practitioner

Replacement of Erf Beacons

Education

University of Pretoria

BLandm (Cum Laude), 1988 - 1992

Land Surveyor

slide48

S V R Land Surveyors

246 Willem Botha

WierdaPark

012 654 9769

slide49

Introduction

Role of Land Surveyor

What does a Land Surveyor do?

Requirements before submission to Surveyor General

Sectional Titles

Extension of Section

slide51

• University degree

  • • Register at Institute of Professional Land Surveyors
  • • Working closely with:
      • o Town Planners
      • oArchitects
      • o Transfer Attorneys
      • o City council
slide53

• Cadastral

      • o New Townships
      • o Consolidations
      • o Sub Divisions
      • o Servitudes
      • o Sectional Titles
      • o Replacement of Erf Beacons
slide54

• Non Cadastral

        • o DetailSurveys
        • o Construction Surveys
slide56

• Consolidation

      • Approval from Town Council
      • 60 Days after Submission
slide58

• Sub-divisions

      • Approval from Town Council
      • Pegging of Erf or Erven
      • Not the Remainder
slide63

Why Sectional Title?

        • • Necessary when you have more than one owner on a single property (erf or stand) examples
            • o Block of Flats
            • o Town House Complex
            • o Duets
            • o Game Farm Developments
slide64

• Pre-requirement for Sectional Title Submission to

  • Surveyor General
        • o Second Dwelling Approval
        • (City Council)
        • o Approved Building Plan
        • (City Council)
        • o Buildings Completed to Roof Height
slide66

• Any addition i.e.

        • o Stoep
        • o Balcony
        • o Car Port
        • o Loft
        • o Garage
        • o Additions to Existing Building
slide71

Please Remember

Home owners either have approved building plans or no building plans but seldom sectional title plans for extension of section ! ! ! ! ! ! !

Once the property is put up for sale please check if building plans and sectional title plans are up to date.

tertius horak

SKILLS AND EXPERTISE

Residential property design

Commercial property design

Industrial property design

Project Management

Quantity estimation

EDUCATION

Technical College SA

Nat. Tech. Dipl. (Construction & QS)

QBE

TertiusHorak

Owner –

KAROH ARCHITECTURAL DESIGN STUDIO

Senior Professional Architectural Technologist

slide74

South African Council for the Architectural Profession

    • 1 Architect (degree)
    • 2 Senior Professional Architectural Technologist
    • 3 Professional Architectural Technologist
    • 4 Professional Draughtsman
slide75

The role of professionals is multi-functional.

    • 1 Advice on a wide scale related to the full scope of works
    • 2 Advice related to SANS 10400
    • 3 Advice related to Town planning scheme and by-laws
    • 4 Practical design
    • 5 Supervision and quality control
    • Ultimately to assist a client in achieving his goal within the
    • requirements of the trade
slide76

The process of plan approval

Submission of any building plan with any authority vests only with persons registered with SACAP.

slide77

Time frame to approve plans

  • Plans are generally approved by City councils
  • City councils have 30 days
  • Disputes with city council interpretation
  • Plans can be obtained by or with consent of the registered owner
  • Responsibility of the home owner to always produce proof of approved plans
  • Loss of plans at city council
slide78

Timeframe for plan approval

1. Scope of project, appointment and design 1-4 weeks

2. Finalizing of plans & documents, signatures 1-4 weeks

3. Submission to Council 1-5 days

4. Approval by Council 4-8 weeks

slide79

Process of approval at Council

1 Submission of documentation and plans to Building office

2 Registration by building office

3 On site inspection by building inspector

Scrutinizing of plans by Plan examiner

5 Geology

6 Transport

7 Water & sanitation

slide80

8 Health

9 Electricity

10 Fire

11 Town Planning

12 Roads & storm water

13 Subdivision & consolidation

14 Property Services

Finance

Occupation certificates

slide81

Cost of plan approval

Example eg. 80m² addition not yet on plans

Professional fee R 8 000.00

(3,5 -7,5% of contract value or rate per m²)

Buildingline & height relaxations R 1 000.00

Plan copies, documents and preparation R 500.00

Appointment of engineer

Submission to Council (80m² @ R11 per m²) R 880.00

Other applications to Council (Relaxations @ fire)

Administrative fee for runner R 1 500.00

Council submission fees

11.00/m² with a minimum fee of R 440.00

Additional fees

slide82

Problems occurring due to different requirements of the old and new regulations

Implementation of the new National Building Regulations

(SANS 10400) 2010.

slide83

The role of a SDP for commercial properties

Site Development Plans (SDP)

Purpose of a SDP

slide84

Coverage, FAR and GFA

Coverage is expressed in percentage terms

It is calculated as the area as a percentage of the total ground floor area divided by the total site area

FAR (floor area ratio) is expressed as a ratio of the total of all floor areas divided by the total site area

The reverse calculation to determine the maximum FAR is by multiplying the GFA (gross floor area) by the area of the property

slide86

Requirements regarding the NHBRC and Enrolment

The principle to create a fund

All new residential structures

Compulsory irrespective of finance

Guarantee for a five year period

Cost of enrolment

Enrolment not applicable

slide87

Frequent questions

Where and how are building plans obtained?

Who may apply for such plans?

What is the cost?

How long does it take?

What if plans are missing or non existing?

slide88

What is the cost to re measure and provide new plans for a structure and how long does this take?

1 New house

2 Additions

Pools, wendy’s, lapa’setc

What plans or permission is required to build something which was already approved on a previous plan but not concluded at that point in time?

Availability and fees

dougie donald
Dougie Donald

Education

NHDP Building Management

Skills & Experience

21 Years –City Council Building inspector

Chief Building Officer –Tshwane Metro Region 4(Centurion)

Chief Building Inspector

Building Control Office Region 4

slide91

Building Control office (Tshwane)

Building Control officer (Tshwane)

Deputy Director Deputy Director

Regions

1 2 3 4 5 6 7

AkasiaSinoville Pretoria Centurion CullinanPtaEast Kungwini

Central & West

Office Manager

slide92

Office Manager

Chief plan examiner Architect Chief building Inspector

(Dougie Donald)

6 Building inspectors 1 Law enforcement

Officer

6 Zones in Centurion

slide93

Duty of Building Control Office

Building industry +

All buildings in Tshwane are built according to

National Building regulations Town planning scheme

RSA Tshwane

slide94

National Building regulations SANS 10400 of 2010

Act for whole RSA

e.g. Materials SABS

Stairs

Ventilation

Ceiling heights

Fire installation

Stormwater

Foundations

Safety

Drainage

Roofs

Walls

Floors

Glazing

slide95

Town Planning scheme

    • • Every town
    • • Differ from town to town
    • • Akasia
    • PretoriaTshwane 2008 New Town planning scheme
    • Centurion
slide96

What does Town planning regulate?

        • • Zoning
        • • Building line
        • • Floor space ratio (FSR)
        • • Density
        • • Height of buildings
        • • Storeys
slide97

When do we inspect?

    • 1. If requested by owner
        • • Are building built according to National building regulations (NBR)?
    • 2. Complaints & inspection
        • • Enforce law if buildings out of National Building regulations
  • NB: Duty on current owner to ensure building is according to
        • - NBR
        • - Town planning scheme
slide98

Occupational certificate

  • When?
    • 1. New buildings
    • 2. Addition to buildings
    • 3. Structural alterations to buildings
    • 4. Additions to property
  • Before 2000
  • After 2000
slide99

Process to obtain occupational certificate

    • 1. Submit building plans
    • 2. Approve building plans
    • 3. Request all necessary inspections
      • 3.1 Foundation
      • 3.2 Floor level
      • 3.3 Roof
      • 3.4 Open drain
      • 3.5 Final drain
      • 3.6 Final building
slide100

Certificates

  • Foundation
  • Stairs
        • • Engineers
  • Slab
  • Roof
        • • Glazing (glass)
        • • Electric
        • • Plumber
  • 5. Occupational certificate
slide101

Owner uncertain

    • • Building plans
        • Anyone inspect (seller / purchaser / agent)
        • No copies
        • Building office
  • Centurion c/o Basden & Rabie streets Centurion
  • Pretoria across MunitoriaIsivono building
  • Akasia 6649 Dale street, Karenpark
slide102

What must be on a plan?

    • 1. Buildings
    • 2. Swimming pools
    • 3. Lapa
    • 4. Wendy house
    • 5. Boundry walls
    • 6. Walls
    • 7. Louvre deck
    • 8. Carport
slide103

Transfer by conveyancer

      • • NBR every owner must have plan
      • • Inspector enforce against current owner
      • • Excuse ignorance! NO
      • • No prohibition to transfer?
      • • Banks?
      • • Possible future legislation
slide104

Advice

        • • Sellers:
          • 1. Make sure if plans are in order
          • 2. If not, get plans in order
          • Occupation certificate
        • • Purchasers to make sure plans are in order
slide105

Enforcement

    • 1. NBR
    • e.g.
        • • Stairs
        • • Ceiling
    • 2. Town Planning scheme
        • • Density
        • • Storeys
    • Notice to correct
tiaan m c van der berg
Tiaan (M.C.) van der Berg

Skills & Expertise

Conveyancing

Property Law

Notarial Work

Mediation

Contracts

Practice Management

Education

University of Pretoria/AFSA

Higher Diploma in Alternative Dispute Resolution (Cum Laude), 2000

University of Johannesburg

Higher Diploma in Labour Law, 1997

University of Pretoria

LLM (Constitutional Law), 1994

LLB, 1991 - 1992

BLC, 1988 - 1990

Director at M.C. van der Berg Incorporated

Attorney, Conveyancer & Notary

slide107

Framework

  • The problem
  • Can MC (your attorney) transfer property
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
slide108

The problem

  • Building plans generally not in order
  • Sectional plans not updated
  • Insurance
  • Home Owners Association
  • Banks may require
  • Purchaser may require
  • Future legislation
  • Estate agent wants to earn a living
  • Not one solution
  • Estate agents approach can differ
slide109

Framework

  • The problem
  • Can MC transfer property
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
slide110

2. Can MC transfer property?

  • Any prohibition to transfer property?
    • • Building plans
    • • Sectional plans not in order
    • • Zoning
    • • Occupational certificate
    • In other words:
  • A. Statutory prohibition?
  • B. Contractual stipulation?
  • C. Bond condition?
slide111

2. Can MC transfer property?

  • A. Statutory prohibition?
        • currently none
        • future legislation?
slide112

2. Can MC transfer property?

  • B. Contractual stipulation?
    • • Condition vs warrantee
    • • Condition
    • - add clause to contract
    • “the seller must provide the purchaser withapproved plans before transfer”
    • -Obligation on MC
    • -can only transfer
    • • if plans are approved!
    • • If plans are not approved
    • - only with consent from purchaser
    • - then approve after registration
    • ▪ retention?
    • ▪ problem - can plans be approved?
    • ▪ how long will purchaser wait?
slide113

2. Can MC transfer property?

  • B. Contractual stipulation?
    • • Condition vs warrantee
    • • Warrantee
    • - Add clause to contract
    • “seller warrantees that plans are in order”
    • Obligation on Seller:
    • - Sidestep defect issue
  • Purchaser cancels
  • ? If not Lower purchase price
  • Purchaser enforces warrantee
slide114

2. Can MC transfer property?

C. Bond condition?

• Contract subject to bond

Building plans Legal status of

Sectional plans bond?

• Bank requires Zoning

Occupational certificate Only conditional

Comply with request

Seller can

Suspensive condition not fulfilled

Bond only conditionally approved

Therefor no transaction

slide115

Framework

  • The problem
  • Can MC transfer property?
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
slide116

3. Obligation to disclose – Seller?

    • • Zoning
    • • Building plans not in order
    • • Sectional plans
    • • Occupational certificate
  • Must seller inform purchaser?
    • A. Statutory obligation to disclose?
    • B. Common law obligation to disclose?
slide117

A. Statutory obligation to disclose

        • Consumer Protection Act
  • Transaction = CPA compliant YES seller must disclose
        • • Developer
  • Seller • Bank
        • • SpeculatorIf not disclosed
        • statutory warrantees
        • or Purchaser can
  • Reduce purchase price Right to cancel
  • Transaction = Not CPA compliant NO obligation on seller to disclose
  • NO statutory warrantees
        • • Typical transaction
slide118

B. Common Law obligation to disclose

  • In absence of legislation
  • Default – common law
  • Non CPA transactions = subject to common law
  • Important to understand common law
slide119

B. Common Law obligation to disclose ….

Defects existed before 24 April 2013

Contract concluded

Common Law

Patent / Latent defects

Regulate position

Building plans

Sectional plans

Zoning

Occupational certificate

slide121

A. Patent defect

Patent defect isvisible or visible with reasonable inspection

Zoning Zoning certificate

Building plans City council

Sectional Title plans Deeds Office

Can argue legal defect = patent

Therefore advise purchaser to inspect

slide122

A. Patent defect…

  • If legal defect = Patent
  • Common Law Caveat Emptor!(Purchaser beware)
  • THEN Zoning
    • Legal obligation on purchaser to ensure Building plans are in
    • Sectional plans order
    • No legal obligation on seller to disclose
slide123

B. Latent defect…

    • Latent defect is not visible or visible with reasonable inspection
slide124

B. Latent defect…

If legal defect = latent

Common Law Seller Purchaser

As general rule seller is liable for latent defects

Warranty

There is no latent defects!

slide125

BUT

Voetstoots (as is) reverses position

Voetstoots clause excludes / cancels warranty

Most estate agent’s contracts

If Voetstoots no warranty against latent defects

If Voetstoots Latent defect = purchaser’s problem

Warranty

There is no latent defects!

slide126

UNLESS

  • Seller 1 Knew of latent defect *Onus of proof
  • 2 Fraudulently & on purchaser
        • • Deliberately conceals existence
        • • To move seller to buy * Very difficult
        • to prove
  • If purchaser can prove 1 + 2 seller’s problem
slide127

Is legal defect e.g.

non-compliance with Building Regulations?

PatentLatent

slide128

Van Nieuwerkvs McCrae (Witwatersrand High Court) (2007)

      • • No approval of Building plans
      • • High court “assumption there is an implied warranty
      • Buildings are erected in compliance with statutory requirement”
      • • Voetstoot clause in contract
    • • Court rules
      • - Voetstoots clause only relates to physical defects
      • - Physical nature i.e. geyser, roof, sewerage etc
          • Not legal issues i.e. plans, zoning
  • Therefore : Purchaser can assume plans are approved as on date of contract
slide129

Odendaal vs Ferraris (Supreme Court of Appeal) (2008)

  • Facts
    • • Seller appoints estate agent
    • • Purchaser introduced to property by agent
    • • Purchaser inspects property
    • • No access to an outbuilding
    • • Agent assured purchaser property is in faultless condition
    • • Contract is entered into
slide130

• Purchaser occupies property before registration

  • Purchaser notices sewerage manhole in outbuilding before registration
  • • Purchaser approaches Municipality
  • • Ascertains outbuildings not on plans
  • • Purchaser instructs bank not to register bond
  • • Seller sees this as repudiation, places purchaser on terms and cancels transaction
  • Purchaser refuses to accept cancellation
  • • Seller approaches court to evict purchaser
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•Seller argues:

  • Legal (plans) defect is latent
  • Voetstootsclause protects seller
  • Problem is purchaser’s
  • • Purchaser argues:
  • 1. Voetstoots not applicable
      • o Van NieuwerkvsMcCrae (W)
      • o Implied warranty buildings are erected in compliance with statutory requirements
      • o Voetstoots only deals with physical defects
      • o Voetstoots does not deal with legal defects
      • Voetstoots clause of no effect
      • 2. Seller had prior knowledge
      • Furthermore Seller knew of defects
      • Had to disclose
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Supreme Court of Appeal

  • Court rules
  • Contravention of Building Regulations =Latent defect
  • Physical defects
  • Voetstootsclause protects seller latent and patent
  • Legal defects
  • Remember! Unless purchaser can prove that seller
      • - Knew of defect
      • - Fraudulently &
      • - Deliberately conceals
      • To move purchaser to buy
  • SCA rules - Seller could not prove this
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Framework

  • The problem
  • Can MC transfer property?
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
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4. Obligation to disclose – agent

Agent

CPA CPA

Seller Purchaser

Patent

No duty to ascertain any defects

Latent

But: If agents are aware must disclose (EAAB code of conduct)

Don’t give oral warranties

Advice: Purchaser must inspect properly

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Framework

  • The problem
  • Can MC transfer property?
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
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4. Where does this leave purchaser?

    • If patent defect Caveat Emptor
            • o Inspection at City council / deeds office
            • o Before making offer
                  • o Purchaser is not protected
                  • Purchaser must inspect
    • If latent defect
          • No voetstoots – common law warrantee
          • Voetstoots
            • o Protects seller
            • * patent + * latent
            • Unless seller has prior knowledge of latent
            • o Purchaser must prove fraud
            • o Seller is protected
            • o Purchaser is not protected
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Contractual warrantee

      • o “Plans are in order”
      • o Purchaser is partially protected
      • Obligation on seller to provide
  • Contractual condition
      • o “can not register if plans are in order”
      • o Purchaser is protected
      • Obligation on MC
  • Bond condition
      • o condition in bond instruction
      • o“provide bank with approved plans”
      • o Purchaser is protected
      • o Risk of cancellation
      • Cannot register
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Framework

  • The problem
  • Can MC transfer property?
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
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6. Your dilemma1. Most properties not 100% on plans2. Legally need to be 100% on plans3. Not legal requirement to transfer4. Require plans from seller - ? Mandate5. Advise purchaser to inspect – no offer6. Ignore - initial bank requirement - bank on instruction7. unethical conduct / civil claim Property report

property report
Property report
  • Not a legal requirement
  • Not a list of contractual warranties
  • Not a list of patent defects
  • Not a list of all latent defects
  • Is a list of latent defects seller is aware of
  • Purchaser acknowledges receipt
  • Make provision building plans

sectional plans

zoning

8. Protects agents

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Framework

  • The problem
  • Can MC transfer property?
  • Obligation to disclose - seller
  • Obligation to disclose – agent
  • Where does this leave purchaser?
  • Your dilemma
  • Our advice
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7. Our advice

  • Different horses for different courses
  • You must choose
    • 1. Advise seller at listing
        • o Establish if plans are in order
        • o If not – get it in order immediately
        • o Consequences
    • Advise purchaser to
        • o inspect at city council / deeds office
        • o require warrantee all improvements comply with statutory and building regulations
    • Protect yourself as agent
        • o Don’t give oral warrantees to purchaser about plans
        • o Advise purchaser to inspect
        • o Use property report
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VISIT US AT

  • www.mcvdberg.co.za
  • Or email us at
  • mcademy@mcvdberg.co.za
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