Residential Property Perspective Factors to consider when building or buying a house

All factors, positive and negative, legal and financial, should be thoroughly investigated and considered before building or buying property, as it is a costly and lengthy process.

The financial implications of acquiring property will impact an individual or a household for many years into the future. Therefore, the impact of a possible increase in interest rates should be taken into account if a property will be mortgaged.

A tax clearance certificate from the South African Revenue Service (SARS), stating that the tax affairs of the prospective owner of a property are in order with SARS, is one of many documents needed before the property can be registered at the Deeds Office.

The following aspects also need to be considered and checked when building a new house or buying an existing one:

Building a new house

  • Make use of a reputable building contractor or developer by obtaining reliable references and checking up on previous projects (quality of workmanship, delivery times). A contractor should ideally be registered at the NHBRC and be a member of the Master Builders Association.
  • Obtain a detailed and signed quotation from the building contractor or developer.
  • Obtain a signed contract between the new owner and the building contractor or developer.
  • Ensure the material is specified in the quotation and contract.
  • Obtain certainty that the land is zoned for residential development.
  • Apprise yourself of any servitudes and restrictions that may be stipulated in the title deed.
  • Apprise yourself of the physical location, address and stand number as stipulated in the title deed.
  • Apprise yourself of the size of the stand as stipulated in the title deed.
  • Check the exact borders of the stand, making sure perimeter walls of the properties bordering the stand are in the correct position.
  • Apprise yourself of the availability of municipal services (water, sewage, electricity and refuse removal).
  • Obtain a full set of building plans, officially approved by the local government.
  • Ensure you have knowledge of all building restrictions and regulations as stipulated by the local government.
  • Examine the slope and ground formation of the stand, which may necessitate levelling and excavation operations, special draining systems, retaining walls, concrete reinforcement, special construction methods and the involvement of an engineer. These aspects may have significant cost implications.
  • Check the views onto and from the site.

Buying an existing house

  • Apprise yourself of the physical state of the property, involving expert opinion if there are any uncertainties.
  • Apprise yourself of the stand size and building area of all structures.
  • Examine the possibility of extensions to the house and outbuildings, or the building of a pool, lapa or carport, taking into account existing structures and the availability of space on the stand, without transgressing building restrictions and regulations.
  • Apprise yourself of the possibility of adding value to and possible over-capitalisation of the property when doing renovations and extensions.
  • Take account of the position of the house on the stand with regard to wind directions.
  • Take note of the direction and extent of the run-off of rainwater in the event of heavy downpours.
  • Take note of the extent to which structures such as walls and foundations are or may be impacted by root systems of large shrubs or trees in the garden.
  • Obtain certainty that building restrictions and regulations have not been violated by obtaining a full set of approved building plans for all structures on the stand.
  • Obtain certainty that all municipal accounts for property tax, electricity, water, sewage and refuse removal have been fully paid by the owner. A clearance certificate, stating that all accounts have been fully settled, and which is valid for a period of 120 days, must be issued by the municipality.
  • Apprise yourself of the existence of any business rights on the property or other properties in the area and the possibility of such rights being granted in future.
  • Take note of other properties in the area already being used for business purposes, which may impact traffic volumes, noise pollution and security.
  • Apprise yourself of any future plans by the local government to widen streets, open up cul-de-sacs or rezone vacant land in the vicinity for high-density residential developments or commercial use, which may impact traffic volumes, noise pollution and security.
  • Apprise yourself of the extent of traffic congestion and noise pollution in the area by visiting the property at different times during the space of a week.
  • Take note of trends in property values in the area.

Courtesy Jacques du Toit Senior Economist ABSA Bank

 

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