Zoning Certificates: South African Property Developers Beware!!

Court warns developers not to rely on local authorities to know the correct zoning of their property.

The KwaZulu Natal High Court in Eagle Creek Investment 138 (Pty) Ltd v Hibiscus Coast Municipality and Another [2010] ZAKZDHC 24 (16 July 2010) gave developers an unusual warning. The court in its decision warned developers not to rely on local authorities to know the correct zoning of their property.

In terms of the facts in the matter, the developer obtained a written zoning certificate from the municipality which stated that its property was zoned "General Commercial 2". On the strength of the information contained in the zoning certificate, the developer prepared and lodged building plans with the municipality for the construction of a motor vehicle dealership on the property. The municipality approved the plans and the developer commenced construction of the dealership.

The owners of the neighbouring properties lodged objections against the construction of the dealership. The municipality then decided that the property was in fact zoned "Limited Commercial" which meant that the plans could not have been approved. The municipality reasoned that it had relied incorrectly on zoning maps drawn for it by a third party. The municipality accordingly demanded that the developer cease construction of the dealership immediately. Two months later the municipality did an about turn and withdrew the "stop work" order allowing the developer to continue with its construction.

The owners of the neighbouring properties subsequently made an application to court and were granted an interdict halting construction. The court agreed with the neighbours in its finding and held that the property was indeed zoned "Limited Commercial" and therefore set aside the approval of the building plans.

As a result, the contractor sued the municipality for R1,018,079.64 (one million eighteen thousand and seventy nine rand and sixty four cents), which it claimed it had suffered as damages.

In its defence, the municipality claimed it was immune from claims of damages arising from the negligent exercise of its statutory duties.

Unfortunately for the developer, the court upheld the municipality's defence on the basis that the municipality enjoyed immunity in terms of the local (KZN) Ordinance.

Accordingly, developers must do their own homework in respect of establishing the zoning of their properties to ensure that such properties are appropriately zoned. Further, if developers do run into any problems it is advisable to obtain legal advice promptly.

Courtesy: SAPOA - The South African Property Owners Association

For more information contact:

Jane Padayachee
Events Manager
SAPOA
The South African Property Owners Association
Tel: +27 11 883 0679/83
Cell: 082 332 7641
Website: http://www.sapoa.org.za