SA Property Law - Does a Seller of a property need to produce municipal plans?

Although there is no obligation on a Seller to produce Municipal Plans which reflect that all the buildings on the property have been approved by the Local Authority, this becomes a contentious issue in a situation where the Purchaser, during the transfer process becomes aware that there are no approved plans for the whole or part of the property. This normally results in a lengthy delay in the finalisation of the transfer.

What is the law in regard to this issue?

For a long time it was regarded that the Seller was protected by the provisions of the voetstoets clause, and if the Seller was not aware of the lack of plans and the Purchaser did not request copies, the Purchaser was obliged to take transfer of the property as is. This was the situation up until three years ago, when it was held by the Court in an Eastern Cape matter that it was an implied term of all sales of immovable property that plans for the buildings were properly approved. This judgment was subsequently overturned by the Supreme Court of Appeal, which meant that the protection afforded to the Seller by the voetstoots clause came into effect again.

Many estate agencies have a clause in their Agreements in terms of which the Seller warrants that Municipal Plans are properly in place. If it is found at any stage after signature of the Sale Agreement that there are no/incomplete plans, then the Seller will be bound to the Purchaser by such a warranty and will have to arrange for the drafting and approval of these plans prior to registration of transfer.

In conclusion, although Municipal plans are required in terms of the National Building Regulation Act, in regard to the contractual relationship between a Seller and a Purchaser, the Purchaser can only insist on properly approved plans if there is a clause to that effect in the Sale Agreement. It is our experience that most Purchasers expect that the Municipal Plans are in order.

Therefore if you are a Purchaser, we suggest that you ensure that there is a clause in your Sale Agreement stating that the Seller warrants that there are approved plans for all the buildings and structures on the property. If you are a Seller then you should be aware of whether such a clause is in your Sale Agreement obliging you to have approved plans and making sure you are in compliance in order to avoid unnecessary delays with the transfer.

Source: Meumann White
Courtesy: The EAAB - Estate Agency Affairs Board

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