Property Law - Planning to sell without approved plans?

Few people appreciate the complexities that can arise when a property, on which buildings were erected without municipal approval, is sold. Let us explain.

Is Building approval always a requirement?

Yes, as required by the Building Standards Act, local authorities prescribe that approval must be obtained for all building works and renovations on properties. Some leniency is afforded to "minor building works", as defined in that Act, in which instances a municipality may be approached for a written relaxation of the necessity to obtain approval. This is, for example, the position with regard to wendy houses smaller than 5sqm.

Voetstoots and Building Approvals

When a property is sold, the agreement will in most instances include a voetstoots clause. This means that the purchaser accepts the risk relating to defects existing at the time of the sale, patent or latent (not visible). The exception hereto is instances where the seller fraudulently concelaed latent defects that he was aware of from the purchaser - in which case the seller remains liable. (Note that the position is somewhat altered if the Consumer Protection Act applies to the agreement between the parties, e.g. where the seller is a developer.)

Our law considers that the property with buildings erected without municipal approval, is a property with a latent defect. As indicated, a voetstoets clause ordinarily covers latent defects and a seller will not attract liability if he sells a property with unauthorised building works. However, if the seller knows that there are no plans (e.g. where he himself effected the renovations) and deliberately conceals this fact with the intention to defraud the purchaser, the seller cannot hide behind the voetstoots clause.

The Problems

The absence of approved plans may trigger a municipality to refuse further renovations a purchaser had planned for, at worst, a finding that the illegally erected structure be demolished.

A defect that is of significant nature and affects the use and enjoyment of the property, allows the purchaser cetain remedies. The most far-reaching of these is cancellation of the agreement, which is available, if the purchaser proves that the defect is so serious that he would not have bought the property had he known this. Other remedies include the reduction in purchase price or a claim for damages, depending on the gravity of the defect and the circumstances.

So, if your are selling your house and concerned about the status of buidling renovations, let us assist you in the process. Contact us at [email protected]

Courtesy: STBB Smith Tabata Buchanan Boyes