3 Legal issues pertaining • Building plans• Sectional plans• Zoning & property rights24 April 2013
4 Multidisciplinary nature of problem LegalTown planningAgentSurveyorCityCouncilArchitect
5 Multidisciplinary nature Property law is complexArchitectsSurveyorsWork together Town plannersConveyancersAgents
6 Purpose of seminar 1. Hear from experts – other fields 2. Answers on FAQ3. Give direction future
7 Sonja du Toit Skills & Expertise Education Conveyancing Property Law Commercial ContractsSectional Title DevelopmentTownship EstablishmentNotarial WorkEducationUniversity of PretoriaLLB (Cum Laude),BLC (Cum Laude),Director at M.C. van der Berg IncorporatedAttorney, Conveyancer & Notary
9 1. How did sectional titles originate? 2. Differences between sectional title and full title3. Opening of a sectional title scheme4. Terminology5. Extension, subdivision and consolidation of a unit
10 1. How did sectional titles originate? Definition of property ito common law:- Ground- Structures attached theretoShortcoming of the definition- no ownership of “flat”Solution to the problem- Previously: share block schemes- Sectional titles act
11 Sectional title 2. Differences between sectional title and full title Owner of erf and structuresattached theretoNo body corporateCan improve the property withapproved building plansRates & taxes and consumptionof water & electricity payable tolocal municipalityOwner of the unit & undividedshare in common propertyBody corporate –all owners are membersConsent by body corporate,building plans and new sectionaltitle plans for improvementsRates & taxes and consumptionpayable to local municipality
12 PROPERTY INFORMATION PROPERTY INFORMATION Property Type ERF Erf Number Property TypeERFErf Number776Portion Number15TownshipCLUBVIEW EXT 39Local AuthorityCITY OF TSHWANE METROPOLITAN MUNICIPALITYRegistration DivisionJRProvinceGAUTENGDiagram DeedT86055/1994ExtentSQMPrevious Description-LPI CodeT0JRPROPERTY INFORMATIONProperty TypeSECTIONAL TITLE UNItUnit1Scheme NameSS SNEAD MANORScheme Number/Year134/2008Situated AtCLUBVIEW EXT 90 , 1095 , 0Local AuthorityCITY OF TSHWANE METROPOLITAN MUNICIPALITYRegistration DivisionJRProvinceGAUTENGDiagram Deed-ExtentSQMPrevious DescriptionLPI CodeT0JR ,D553/2007
13 Example: If levies are R5 000 per month: Unit 1 pays:R x ,2597% = R2 012,98Unit 2 pays:R x ,7403% = R2 987,02
14 3. Opening of a sectional title scheme • Sectional title plans- drafted by surveyorapproved 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
15 4. Terminology Unit Section Common property Exclusive use ( sect 27) Right to extend
16 Unit: Section + undivided share in common property Section = houseCommon property: Areas surrounding unitExclusive use ( sect 27)in terms of notarial in terms of rulesdeed of exclusive useReal right cannot be bondedcan be bonded
17 Right to extend: addition of more units - Developer- On opening of scheme- For a specified period- Horizontally or vertically
18 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 inparticipation quota- More than 10% - consent by all bondholders- Effect on exclusive use areasSimultaneously with transferAlso possible to subdivide and consolidate units
19 Velocity Townplanning Lydia LewisSkills & ExpertiseStrategic Planning and Integrated PlanningTownship Establishment ApplicationsDevelopment Control applicationsDevelopment Investigations and AdviceUrban Renewal & Township DesignsDue Diligence studies / Property AuditsEducation & MembershipUniversity of PretoriaB(TRP)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 MemberofVelocity Townplanning&Project Management
21 Introduction to town planning Why Town Planning?Spatial / Strategic PlanningTown Planning SchemesTypes of land use applicationsProfessions involvedProcessApplicationsLand Development Requirements (LDR)
23 Introduction B(T&RP) UP, TRP (SA) Lydia LewisB(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.
25 Thus: What may happen where in the city, and how much of it. 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.
27 - Regional Spatial Development Frameworks (RSDF) 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, etcPoliciesGuest House, Creche, Commune, Second Dwelling, Home Office, etc.Environmental
30 Land uses are managed by what are known as Town-planning schemes. Each municipality has its own, unique Town-planning schemeTshwane is using The Tshwane Scheme of 2008.Title DeedsIn 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...”
31 Town Planning Schemes (Land use management) Residential 1 Business 1Business 2Business 3Business 4
32 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
33 - Geotechnical Engineer - Conveyancer - Town Planner Professions involvedA 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
34 ProcessAfter 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.
35 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).TimelineCosts
36 Process (public participation, council circulation, external Process (public participation, council circulation, external circulation)Submission (including the Bondholder’s Consent).Advertised in the Provincial Gazette and 2 other newspapersfor two consecutive weeksSite notice is displayed on site for 14 days.Period for objections is 28 days.Application is distributed to the different departments of theMunicipality.- Comment period is 60 days from submission.The City Planning Division makes a recommendation whichis referred to the applicant for comments.The application is approved and the amendment scheme ispromulgated in the Provincial Gazette
38 A rezoning application is subject to certain bulk services Contributions payable to local authority.Bulk services contributions can be regarded as taxeslevied by the local authorityfor the increase in the capacity of the existingstorm water drainagesewer systemwater provisionelectrical networkupgrading of roadsdue to the rezoning application and is determined according to the area / ”bulk” of the new development.From “Residental1” erf to “Business 4” erf = ± R
39 consent use application Is not a permanent right. When?rezoneconsent use applicationIs not a permanent right.A Consent Use application in terms of the relevantTown Planning Scheme.
40 Removal of Restrictive Conditions Application The importance of title conditions as development control measures hasdiminished over the yearsdue to implementation of more effective & flexible policy documents & laws such as Town Planning Schemes and Municipal Ordinances.- Building Lines- Uses- Building Materials, etc.
41 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- ServitudesTime & Costs
42 Consolidation Application When you want to consolidate two or more portions with each other.
43 Things you must consider when you want to consolidate: - Same rights- Same owner- In the same townshipNotarial tiesApplicationadvertised in the press or on the property itselfthe approval thereof is left to the discretion of the Council- Section 38 process
44 Other Applications Purchase of Council land Second dwelling Relaxation of building linesAdvertisements along the Provincial / Gautrans Roads Etc.
45 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
46 Floor Area Ratio or FAR (FSR) Height Parking Requirements Includes the following:LanduseCoverageDensityFloor Area Ratio or FAR (FSR)HeightParking RequirementsBuilding Lines
47 Skills & Expertise Education Eamon Swart Township Establishment Sectional Title PractitionerReplacement of Erf BeaconsEducationUniversity of PretoriaBLandm (Cum Laude),Land Surveyor
48 S V R Land Surveyors246 Willem BothaWierda Park
49 Introduction Role of Land Surveyor What does a Land Surveyor do? Requirements before submission to Surveyor GeneralSectional TitlesExtension of Section
71 Please RememberHome 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.
72 Tertius Horak SKILLS AND EXPERTISE EDUCATION Residential property designCommercial property designIndustrial property designProject ManagementQuantity estimationEDUCATIONTechnical College SANat. Tech. Dipl. (Construction & QS)QBEOwner –KAROH ARCHITECTURAL DESIGN STUDIOSenior Professional Architectural Technologist
74 South African Council for the Architectural Profession 1 Architect (degree)2 Senior Professional Architectural Technologist3 Professional Architectural Technologist4 Professional Draughtsman
75 The role of professionals is multi-functional. 1 Advice on a wide scale related to the full scope of works2 Advice related to SANS 104003 Advice related to Town planning scheme and by-laws4 Practical design5 Supervision and quality controlUltimately to assist a client in achieving his goal within therequirements of the trade
76 The process of plan approval Submission of any building plan with any authority vests only with persons registered with SACAP.
77 Time frame to approve plans Plans are generally approved by City councilsCity councils have 30 daysDisputes with city council interpretationPlans can be obtained by or with consent of the registered ownerResponsibility of the home owner to always produce proof of approved plansLoss of plans at city council
78 Timeframe for plan approval 1. Scope of project, appointment and design weeks2. Finalizing of plans & documents, signatures weeks3. Submission to Council days4. Approval by Council weeks
79 Process of approval at Council 1 Submission of documentation and plans to Building office2 Registration by building office3 On site inspection by building inspectorScrutinizing of plans by Plan examiner5 Geology6 Transport7 Water & sanitation
81 Cost of plan approval Example eg. 80m² addition not yet on plans Professional fee R(3,5 -7,5% of contract value or rate per m²)Buildingline & height relaxations RPlan copies, documents and preparation RAppointment of engineerSubmission to Council R11 per m²) ROther applications to Council fire)Administrative fee for runner RCouncil submission fees11.00/m² with a minimum fee of RAdditional fees
82 Problems occurring due to different requirements of the old and new regulations Implementation of the new National Building Regulations(SANS 10400) 2010.
83 The role of a SDP for commercial properties Site Development Plans (SDP)Purpose of a SDP
84 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 areaFAR (floor area ratio) is expressed as a ratio of the total of all floor areas divided by the total site areaThe reverse calculation to determine the maximum FAR is by multiplying the GFA (gross floor area) by the area of the property
85 The role of parking on commercial properties The Townplanning Scheme.
86 Requirements regarding the NHBRC and Enrolment The principle to create a fundAll new residential structuresCompulsory irrespective of financeGuarantee for a five year periodCost of enrolmentEnrolment not applicable
87 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?
88 What is the cost to re measure and provide new plans for a structure and how long does this take? 1 New house2 AdditionsPools, wendy’s, lapa’s etcWhat 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
89 Dougie Donald Education Skills & Experience NHDP Building Management 21 Years –City Council Building inspectorChief Building Officer –Tshwane Metro Region 4(Centurion)Chief Building InspectorBuilding Control Office Region 4
91 Building Control office (Tshwane) Building Control officer (Tshwane)Deputy Director Deputy DirectorRegionsAkasia Sinoville Pretoria Centurion Cullinan Pta East KungwiniCentral & WestOffice Manager
92 Office ManagerChief plan examiner Architect Chief building Inspector(Dougie Donald)6 Building inspectors Law enforcementOfficer6 Zones in Centurion
93 Duty of Building Control Office Building industry +All buildings in Tshwane are built according toNational Building regulations Town planning schemeRSA Tshwane
94 National Building regulations SANS 10400 of 2010 Act for whole RSAe.g. Materials SABSStairsVentilationCeiling heightsFire installationStormwaterFoundationsSafetyDrainageRoofsWallsFloorsGlazing
95 Town Planning scheme • Every town • Differ from town to town • Akasia Pretoria Tshwane New Town planning schemeCenturion
96 What does Town planning regulate? • Zoning• Building line• Floor space ratio (FSR)• Density• Height of buildings• Storeys
97 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 regulationsNB: Duty on current owner to ensure building is according to- NBR- Town planning scheme
98 Occupational certificate When?1. New buildings2. Addition to buildings3. Structural alterations to buildings4. Additions to propertyBefore 2000After 2000
99 Process to obtain occupational certificate 1. Submit building plans2. Approve building plans3. Request all necessary inspections3.1 Foundation3.2 Floor level3.3 Roof3.4 Open drain3.5 Final drain3.6 Final building
102 What must be on a plan? 1. Buildings 2. Swimming pools 3. Lapa 4. Wendy house5. Boundry walls6. Walls7. Louvre deck8. Carport
103 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
104 Advice • Sellers: 1. Make sure if plans are in order 2. If not, get plans in orderOccupation certificate• Purchasers to make sure plans are in order
105 Enforcement 1. NBR e.g. • Stairs • Ceiling 2. Town Planning scheme • Density• StoreysNotice to correct
106 Tiaan (M.C.) van der Berg Skills & Expertise Education Conveyancing Property LawNotarial WorkMediationContractsPractice ManagementEducationUniversity of Pretoria/AFSAHigher Diploma in Alternative Dispute Resolution (Cum Laude), 2000University of JohannesburgHigher Diploma in Labour Law, 1997University of PretoriaLLM (Constitutional Law), 1994LLB,BLC,Director at M.C. van der Berg IncorporatedAttorney, Conveyancer & Notary
107 Framework The problem Can MC (your attorney) transfer property Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
108 The problem Building plans generally not in order Sectional plans not updatedInsuranceHome Owners AssociationBanks may requirePurchaser may requireFuture legislationEstate agent wants to earn a livingNot one solutionEstate agents approach can differ
109 Framework The problem Can MC transfer property Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
110 2. Can MC transfer property? Any prohibition to transfer property?• Building plans• Sectional plans not in order• Zoning• Occupational certificateIn other words:A. Statutory prohibition?B. Contractual stipulation?C. Bond condition?
111 2. Can MC transfer property? A. Statutory prohibition?currently nonefuture legislation?
112 2. Can MC transfer property? B. Contractual stipulation?• Condition vs warrantee• Condition- add clause to contract“the seller must provide the purchaser with approved 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?
113 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 issuePurchaser cancels? If not Lower purchase pricePurchaser enforces warrantee
114 2. Can MC transfer property? C. Bond condition?• Contract subject to bondBuilding plans Legal status ofSectional plans bond?• Bank requires ZoningOccupational certificate Only conditionalComply with requestSeller canSuspensive condition not fulfilledBond only conditionally approvedTherefor no transaction
115 Framework The problem Can MC transfer property? Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
116 3. Obligation to disclose – Seller? • Zoning• Building plans not in order• Sectional plans• Occupational certificateMust seller inform purchaser?A. Statutory obligation to disclose?B. Common law obligation to disclose?
117 A. Statutory obligation to disclose Consumer Protection ActTransaction = CPA compliant YES seller must disclose• DeveloperSeller • Bank• Speculator If not disclosedstatutory warranteesor Purchaser canReduce purchase price Right to cancelTransaction = Not CPA compliant NO obligation on seller to discloseNO statutory warrantees• Typical transaction
118 In absence of legislation B. Common Law obligation to discloseIn absence of legislationDefault – common lawNon CPA transactions = subject to common lawImportant to understand common law
119 B. Common Law obligation to disclose …. Defects existed before 24 April 2013Contract concludedCommon LawPatent / Latent defectsRegulate positionBuilding plansSectional plansZoningOccupational certificate
120 Definition A. Patent vs B. Latent Obvious vs Hidden
121 A. Patent defectPatent defect is visible or visible with reasonable inspectionZoning Zoning certificateBuilding plans City councilSectional Title plans Deeds OfficeCan argue legal defect = patentTherefore advise purchaser to inspect
122 A. Patent defect…If legal defect = PatentCommon Law Caveat Emptor!(Purchaser beware)THEN ZoningLegal obligation on purchaser to ensure Building plans are inSectional plans orderNo legal obligation on seller to disclose
123 B. Latent defect…Latent defect is not visible or visible with reasonable inspection
124 There is no latent defects! B. Latent defect…If legal defect = latentCommon Law Seller PurchaserAs general rule seller is liable for latent defectsWarrantyThere is no latent defects!
125 There is no latent defects! BUTVoetstoots (as is) reverses positionVoetstoots clause excludes / cancels warrantyMost estate agent’s contractsIf Voetstoots no warranty against latent defectsIf Voetstoots Latent defect = purchaser’s problemWarrantyThere is no latent defects!
126 UNLESS Seller 1 Knew of latent defect *Onus of proof 2 Fraudulently & on purchaser• Deliberately conceals existence• To move seller to buy * Very difficultto proveIf purchaser can prove seller’s problem
127 non-compliance with Building Regulations? Is legal defect e.g.non-compliance with Building Regulations?Patent Latent
128 Van Nieuwerk vs McCrae (Witwatersrand High Court) (2007) • No approval of Building plans• High court “assumption there is an implied warrantyBuildings 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 etcNot legal issues i.e. plans, zoningTherefore : Purchaser can assume plans are approved as on date of contract
129 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
130 • 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 transactionPurchaser refuses to accept cancellation• Seller approaches court to evict purchaser
131 • Seller argues:Legal (plans) defect is latentVoetstoots clause protects sellerProblem is purchaser’s• Purchaser argues:1. Voetstoots not applicableo Van Nieuwerk vs Mc Crae (W)o Implied warranty buildings are erected in compliance with statutory requirementso Voetstoots only deals with physical defectso Voetstoots does not deal with legal defectsVoetstoots clause of no effect2. Seller had prior knowledgeFurthermore Seller knew of defectsHad to disclose
132 Supreme Court of Appeal Court rulesContravention of Building Regulations = Latent defectPhysical defectsVoetstoots clause protects seller latent and patentLegal defectsRemember! Unless purchaser can prove that seller- Knew of defect- Fraudulently &- Deliberately concealsTo move purchaser to buySCA rules - Seller could not prove this
133 Framework The problem Can MC transfer property? Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
134 Agent 4. Obligation to disclose – agent CPA CPA Seller Purchaser PatentNo duty to ascertain any defectsLatentBut: If agents are aware must disclose (EAAB code of conduct)Don’t give oral warrantiesAdvice: Purchaser must inspect properly
135 Framework The problem Can MC transfer property? Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
136 4. Where does this leave purchaser? If patent defect Caveat Emptoro Inspection at City council / deeds officeo Before making offero Purchaser is not protectedPurchaser must inspectIf latent defectNo voetstoots – common law warranteeVoetstootso Protects seller* patent + * latentUnless seller has prior knowledge of latento Purchaser must prove fraudo Seller is protectedo Purchaser is not protected
137 o Purchaser is partially protected Obligation on seller to provide Contractual warranteeo “Plans are in order”o Purchaser is partially protectedObligation on seller to provideContractual conditiono “can not register if plans are in order”o Purchaser is protectedObligation on MCBond conditiono condition in bond instructiono “provide bank with approved plans”o Risk of cancellationCannot register
138 Framework The problem Can MC transfer property? Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
139 6. Your dilemma 1. Most properties not 100% on plans 2 6. Your dilemma 1. Most properties not 100% on plans 2. Legally need to be 100% on plans 3. Not legal requirement to transfer 4. Require plans from seller - ? Mandate 5. Advise purchaser to inspect – no offer 6. Ignore - initial bank requirement bank on instruction 7. unethical conduct / civil claim Property report
140 Property report Not a legal requirement Not a list of contractual warrantiesNot a list of patent defectsNot a list of all latent defectsIs a list of latent defects seller is aware ofPurchaser acknowledges receiptMake provision building planssectional planszoning8. Protects agents
141 Framework The problem Can MC transfer property? Obligation to disclose - sellerObligation to disclose – agentWhere does this leave purchaser?Your dilemmaOur advice
142 7. Our advice Different horses for different courses You must choose 1. Advise seller at listingo Establish if plans are in ordero If not – get it in order immediatelyo ConsequencesAdvise purchaser too inspect at city council / deeds officeo require warrantee all improvements comply with statutory and building regulationsProtect yourself as agento Don’t give oral warrantees to purchaser about planso Advise purchaser to inspecto Use property report