MCad
emy
“If 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
Multidisciplinary nature
Property law is complex
Work together
Architects
Surveyors
Town planners
Conveyancers
Agents
Purpose of seminar
1.
2.
3.
Hear from experts – other fields
Answers on FAQ
Give direction
future
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
Director at M.C. van der Berg Incorporated
Attorney, Conveyancer & Notary
University of Pretoria
BLC (Cum Laude), 1996 - 1998
SECTIONAL TITLES
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
1. How did sectional titles originate?
1. Definition of property ito common law:
-
Ground
Structures attached thereto
2. Shortcoming of the definition
-
no ownership of “flat”
3. Solution to the problem
Previously: share block schemes
-
Sectional titles act
2. Differences between sectional title and full
title
Sectional title
Full title

Owner of erf and structures
attached thereto

Owner of the unit & undivided
share in common property

No body corporate

Body corporate –
all owners are members

Can improve the property with
approved building plans

Consent by body corporate,
building plans and new sectional
title plans for improvements

Rates & taxes and consumption
of water & electricity payable to
local municipality

Rates & taxes and consumption
payable to local municipality
PROPERTY INFORMATION
Property Type
Erf Number
Portion Number
Township
Local Authority
Registration Division
Province
Diagram Deed
Extent
Previous Description
LPI Code
ERF
776
15
CLUBVIEW EXT 39
CITY OF TSHWANE METROPOLITAN MUNICIPALITY
JR
GAUTENG
T86055/1994
639.0000SQM
T0JR00370000077600015
PROPERTY INFORMATION
Property Type
Unit
Scheme Name
Scheme Number/Year
Situated At
Local Authority
Registration Division
Province
Diagram Deed
Extent
Previous Description
LPI Code
SECTIONAL TITLE UNIt
1
SS SNEAD MANOR
134/2008
CLUBVIEW EXT 90 , 1095 , 0
CITY OF TSHWANE METROPOLITAN MUNICIPALITY
JR
GAUTENG
151.0000SQM
T0JR00370000109500000,D553/2007
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
59,7403% =
R2 987,02
Unit 2 pays:
R5 000
x
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
4. Terminology
1. Unit
2. Section
3. Common property
4. Exclusive use ( sect 27)
5. Right to extend
1.
Unit:
Section + undivided share in
common property
2.
Section = house
2.
Common property: Areas surrounding unit
3.
Exclusive use ( sect 27)
in terms of notarial
deed of exclusive use
in terms of rules
Real right
can be bonded
cannot be bonded
4. Right to extend: addition of more units
-
Developer
On opening of scheme
For a specified period
Horizontally or vertically
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
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
Managing Member
of
Velocity Townplanning
&
Project Management
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)
TOWN PLANNING IN GAUTENG
101
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)
Introduction to townplanning
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.
Why Town Planning?
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.
Spatial / Strategic Planning
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
Spatial Development Plan / Framework
Town Planning Schemes
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...”
Town Planning Schemes
(Land use management)
Residential 1
Residential 2
Business 1
Business 2
Business 3
Business 4
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
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
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.
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
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
Zoning Certificate
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
Consent Use Application
When?
rezone
consent use application
Is not a permanent right.
A Consent Use application
Town Planning Scheme.
in terms of the relevant
Removal
of
Application
Restrictive
Conditions
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.
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
Consolidation Application
When you want to consolidate two or more portions with each
other.
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
Other Applications
• Purchase of Council land
• Second dwelling
• Relaxation of building lines
• Advertisements along the Provincial / Gautrans Roads Etc.
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
Includes the following:
•
Landuse
•
Coverage
•
Density
•
Floor Area Ratio or FAR (FSR)
•
Height
•
Parking Requirements
•
Building Lines
Eamon Swart
Skills & Expertise
Township Establishment
Sectional Title Practitioner
Replacement of Erf Beacons
Education
University of Pretoria
BLandm (Cum Laude), 1988 - 1992
Land Surveyor
S V R Land Surveyors
246 Willem Botha
Wierda Park
012 654 9769
Introduction
Role of Land Surveyor
What does a Land Surveyor do?
Requirements before submission to Surveyor General
Sectional Titles
Extension of Section
Role of Land Surveyor
•
University degree
•
Register at Institute of Professional Land Surveyors
•
Working closely with:
o
Town Planners
o
Architects
o Transfer Attorneys
o City council
What does a Land Surveyor do?
• Cadastral
o New Townships
o Consolidations
o Sub Divisions
o Servitudes
o Sectional Titles
o Replacement of Erf Beacons
•
Non Cadastral
o Detail Surveys
o Construction Surveys
Requirements before submission
to Surveyor General
•
Consolidation
 Approval from Town Council
 60 Days after Submission
Example:
•
Sub-divisions
 Approval from Town Council
 Pegging of Erf or Erven
 Not the Remainder
Example of Parent Diagram
Example of Sub-division Diagram
Original Erf
Sectional Titles
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
•
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
Extension of Section
•
Any addition i.e.
o Stoep
o Balcony
o Car Port
o Loft
o Garage
o Additions to Existing Building
Example: Sheet 1
Example: Sheet 2
Example: Sheet 3
Example: Sheet 4
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
Owner –
KAROH ARCHITECTURAL DESIGN STUDIO
Senior Professional Architectural Technologist
Technical College SA
Nat. Tech. Dipl. (Construction & QS)
QBE
Introduction
South African Council for the Architectural
Profession
1 Architect (degree)
2 Senior Professional Architectural Technologist
3 Professional Architectural Technologist
4 Professional Draughtsman
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
6 Ultimately to assist a client in achieving his goal within the
requirements of the trade
The process of plan approval
Submission of any building plan with any authority vests only with
persons registered with SACAP.
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
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
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
4
Scrutinizing of plans by Plan examiner
5
Geology
6
Transport
7
Water & sanitation
8
Health
9
Electricity
10
Fire
11
Town Planning
12
Roads & storm water
13
Subdivision & consolidation
14
Property Services
15
Finance
Occupation certificates
Cost of plan approval
Example eg. 80m² addition not yet on plans
Professional fee
(3,5 -7,5% of contract value or rate per m²)
Buildingline & height relaxations
Plan copies, documents and preparation
Appointment of engineer
Submission to Council (80m² @ R11 per m²)
Other applications to Council (Relaxations @ fire)
Administrative fee for runner
Council submission fees
11.00/m² with a minimum fee of R 440.00
Additional fees
R 8 000.00
R 1 000.00
R 500.00
R 880.00
R 1 500.00
Problems occurring due to different
requirements of the old and new regulations
Implementation of the new National Building Regulations
(SANS 10400) 2010.
The role of a SDP for commercial properties
Site Development Plans (SDP)
Purpose of a SDP
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
The role of parking on commercial properties
The Townplanning Scheme.
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
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?
What is the cost to re measure and provide new plans for a structure
and how long does this take?
1
2
3
New house
Additions
Pools, wendy’s, lapa’s etc
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
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
Building inspections
Building Control office (Tshwane)
Building Control officer (Tshwane)
Deputy Director
Deputy Director
Regions
1
Akasia
2
Sinoville
3
4
Pretoria
Centurion
Central & West
5
Cullinan
Office Manager
6
Pta East
7
Kungwini
Office Manager
Chief plan examiner
6 Building inspectors
6 Zones in Centurion
Architect
Chief building Inspector
(Dougie Donald)
1 Law enforcement
Officer
Duty of Building Control Office
Building industry +
All buildings in Tshwane are built according to
National Building regulations
RSA
Town planning scheme
Tshwane
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
Town Planning scheme
•
•
•
Every town
Differ from town to town
Akasia
Pretoria
Tshwane
Centurion
2008 New Town planning scheme
What does Town planning regulate?
•
•
•
•
•
•
Zoning
Building line
Floor space ratio (FSR)
Density
Height of buildings
Storeys
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
Occupational certificate
When?
1.
2.
3.
4.
New buildings
Addition to buildings
Structural alterations to buildings
Additions to property
Before 2000
After 2000
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
4. Certificates
Foundation
Stairs
•
Engineers
Slab
Roof
•
•
•
5.
Glazing (glass)
Electric
Plumber
Occupational certificate
Owner uncertain
•
Building plans
 Anyone inspect (seller / purchaser / agent)
 No copies
 Building office
Centurion
Pretoria
Akasia
c/o Basden & Rabie streets Centurion
across Munitoria Isivono building
6649 Dale street, Karenpark
What must be on a plan?
1.
2.
3.
4.
5.
6.
7.
8.
Buildings
Swimming pools
Lapa
Wendy house
Boundry walls
Walls
Louvre deck
Carport
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
Advice
•
Sellers:
1.
2.
3.
•
Make sure if plans are in order
If not, get plans in order
Occupation certificate
Purchasers to make sure plans are in order
Enforcement
1. NBR
e.g.
•
•
Stairs
Ceiling
2. Town Planning scheme
•
•
Density
Storeys
Notice to correct
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
Director at M.C. van der Berg Incorporated
Attorney, Conveyancer & Notary
University of Pretoria
LLM (Constitutional Law), 1994
LLB, 1991 - 1992
BLC, 1988 - 1990
Framework
1. The problem
2. Can MC (your attorney) transfer property
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
1. The problem
1. Building plans generally not in order
2. Sectional plans not updated
3. Insurance
4. Home Owners Association
5. Banks may require
6. Purchaser may require
7. Future legislation
8. Estate agent wants to earn a living
9. Not one solution
10. Estate agents approach can differ
Framework
1. The problem
2. Can MC transfer property
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
2. Can MC transfer property?
Any prohibition to transfer property?
•
•
•
•
Building plans
Sectional plans
Zoning
Occupational certificate
In other words:
A. Statutory prohibition?
B. Contractual stipulation?
C. Bond condition?
not in order
2. Can MC transfer property?
A. Statutory prohibition?
• currently none
• future legislation?
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?
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
? If not
Purchaser cancels
Lower purchase price
Purchaser enforces warrantee
2. Can MC transfer property?
C. Bond condition?
• Contract subject to bond
• Bank requires
Building plans
Sectional plans
Zoning
Occupational certificate
Legal status of
bond?
Only conditional
Comply with request
Seller can
Suspensive condition not fulfilled
Bond only conditionally approved
Therefor no transaction
Framework
1. The problem
2. Can MC transfer property?
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
3. Obligation to disclose – Seller?
•
•
•
•
Zoning
Building plans
Sectional plans
Occupational certificate
not in order
Must seller inform purchaser?
A. Statutory obligation to disclose?
B. Common law obligation to disclose?
A. Statutory obligation to disclose
• Consumer Protection Act
Transaction = CPA compliant
YES seller must disclose
• Developer
• Bank
• Speculator
Seller
If not disclosed
statutory warrantees
or Purchaser can
Reduce purchase price
Transaction = Not CPA compliant
•
Typical transaction
Right to cancel
NO obligation on seller to disclose
NO statutory warrantees
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
B. Common Law obligation to disclose ….
Defects existed before
Building plans
Sectional plans
Zoning
Occupational certificate
Common Law
Patent / Latent defects
Regulate position
24 April 2013
Contract concluded
Definition
A. Patent
Obvious
vs
vs
B. Latent
Hidden
A. Patent defect
Patent defect is
visible or
visible with reasonable inspection
Zoning
Building plans
Sectional Title plans
Can argue legal defect = patent
Therefore advise purchaser to inspect
Zoning certificate
City council
Deeds Office
A. Patent defect…
If legal defect = Patent
Common Law
Caveat Emptor!(Purchaser beware)
THEN
Legal obligation on purchaser to ensure
No legal obligation on seller to disclose
Zoning
Building plans
Sectional plans
are in
order
B. Latent defect…
Latent defect is not
visible or
visible with reasonable inspection
B. Latent defect…
If legal defect = latent
Warranty
Common Law
Seller
As general rule
seller is liable for latent defects
There is no
latent defects!
Purchaser
BUT
Voetstoots (as is) reverses position
Voetstoots clause excludes / cancels warranty
Most estate agent’s contracts
Warranty
There is no
latent defects!
If Voetstoots
no warranty against latent defects
If Voetstoots
Latent defect = purchaser’s problem
UNLESS
Seller 1 Knew of latent defect
2 Fraudulently &
• Deliberately conceals existence
• To move seller to buy
If purchaser can prove 1 + 2
seller’s problem
*Onus of proof
on purchaser
* Very difficult
to prove
Is legal defect e.g.
non-compliance with Building Regulations?
Patent
Latent
Van Nieuwerk vs 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
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
•
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
•
Seller argues:
Legal (plans) defect is latent
Voetstoots clause protects seller
Problem is purchaser’s
•
Purchaser argues:
1. Voetstoots not applicable
o Van Nieuwerk vs Mc Crae (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
Supreme Court of Appeal
Court rules
Contravention of Building Regulations = Latent defect
Physical defects
Voetstoots clause 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
Framework
1. The problem
2. Can MC transfer property?
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
4. Obligation to disclose – agent
Agent
CPA
Seller
CPA
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
Framework
1. The problem
2. Can MC transfer property?
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
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
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
Framework
1. The problem
2. Can MC transfer property?
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
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
Property report
1.
2.
3.
4.
5.
6.
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
7. Make provision
8. Protects agents
building plans
sectional plans
zoning
Framework
1. The problem
2. Can MC transfer property?
3. Obligation to disclose - seller
4. Obligation to disclose – agent
5. Where does this leave purchaser?
6. Your dilemma
7. Our advice
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
2. Advise purchaser to
o inspect at city council / deeds office
o require warrantee
all improvements comply with
statutory and building regulations
3. 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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