Do property owners have an unlimited right to develop their property to the full extent provided by the zoning scheme?

Property owners may have the perception that they can develop their property to its full extent as long as they comply with the parameters provided by the zoning scheme and other legal restrictions such as title deed restrictions. The perception exists that any building erected within the permitted legal parameters is one that neighbours are obliged to tolerate and that they cannot object to building plans that comply with all the legal requirements.

This perception or understanding is at odds with the provisions of the National Building Regulations and Building Standards Act 103 of 1977 (the Act) as construed by the Constitutional Court.

Guidance may be obtained from a recent judgment in the matter of Da Cruz and another v City of Cape Town and another[2017] 1 All SA 890 (WCC) where the Western Cape High Court ruled that this notion that a property owner may develop its property to the maximum extent permitted by a zoning scheme regardless of the nature of the adverse effect on the utility of its neighbour’s property is inconsistent with the provisions of the Act and it also runs counter to the precepts of the common law. The court found that the moderating principle in the regulation of neighbour relations in the common law is reasonableness.

In this matter the court clarified that the building control officer must follow a two phased approach in approving building plans. It should firstly be determined if the building plans comply with all legal requirements. i.e. comply with the zoning scheme etc. and if so, a further assessment should be conducted in terms of section 7(1)(b)(ii) of the Act to assess whether the building is to be erected in such manner or will be of such nature or appearance that the area in which it is to be erected will probably or in fact be disfigured thereby; it will probably or in fact be unsightly or objectionable; it will probably or in fact derogate from the value of adjoining or neighbouring properties; it will probably or in fact be dangerous to life or property. The court referred to this second phase as a contextual assessment of the effect of any building development on the neighbouring properties.

In the matter before the court, the owner of building A obtained approval to extend building A with further storeys that would be flush with the walls of the neighbouring building B.  This was entirely in line with the zoning and legal building parameters.

Building B contained residential apartments with balconies. The construction to building A changed the character of the balconies into small courtyards confined between towering walls. The owner of building B objected to the higher levels of building A built flush up against the balconies. The grounds of objection included the ground that the construction was so exceptionally intrusive and objectionable that it would not reasonably have been foreseen by any notional purchaser of an affected unit in building B. It was also contended that the balconies were previously approved and that a “reasonable notional purchaser and seller of a unit with balconies would never expect that the City having approved those balconies – would then approve a building on the next property which has the effect of rendering those balconies entirely useless”.

The court found that the zoning scheme is not, of itself, dispositive of what may be built on a land unit, and that a statutorily prescribed contextual assessment of the effect of any building development on the neighbouring properties should prevent a building that was unreasonably intrusive, overbearing or otherwise unsightly or objectionable from being erected. Know your rights!

For advice or assistance contact our professional team on Tel 041 5019800.

 

HOW THE “HISTORICAL RATES” JUDGMENT AFFECTS YOU

 “It is declared that, upon transfer of a property, a new owner is not liable for debts arising before transfer from the charge upon the property …” (Constitutional Court Order)

How does the recent Constitutional Court decision on “historical rates” affect you in practice?

Understanding the issue

At issue was that some municipalities would force new property buyers to pay the seller’s “old” municipal debts (rates, municipal services etc).  So you could buy a house thinking that all you had to pay was the purchase price and transfer costs, and end up having to pay old municipal debts run up by previous owners.

We’re talking potentially big money here – R6.5m in one of the cases in question.  And you had to cough up or face losing your home to a sale in execution, as well as threats to disconnect electricity and other services.

Property owners 1, Municipalities 0

In a major victory for property owners, a 2016 High Court decision held that procedure to be unconstitutional.  And whilst the Constitutional Court on appeal said there was actually nothing unconstitutional about the legislation in question, it also confirmed that municipalities cannot use it to collect pre-transfer municipal debts from the new owner.

So how does that decision from our highest court affect you?

Buyers

You are no longer the “soft target” for municipalities and you no longer risk having to pay the seller’s historical debts; you are only liable for rates etc after you take transfer.  The other side of the coin is that municipal debt write-offs generally are bound to increase, and those losses will be passed on to us all as consumers.

Sellers

To avoid delays in transfer, keep all municipal accounts up to date. Remember you cannot pass transfer without a “clearance certificate” certifying payment of rates etc due for the past 2 years. Debt older than 2 years cannot now be claimed from the buyer so expect municipalities to be extra vigilant from now on in collecting arrear rates and service accounts as they arise.  Get legal help immediately if your municipality demands payment of debts older than 3 years – rates prescribe after 30 years, but other debts survive only 3 years (unless of course prescription is interrupted by for example an admission of liability or the service of a summons).

Agents

This decision has been touted as positive for the property market generally and it certainly will reassure any potential buyers holding back from making offers for fear of having to pay huge hidden municipal debts.

Municipalities

“Historical debts”, said the Court, “exist only because municipalities have not recovered them”.  Every municipality is obliged to –

  • “Collect all money that is due and payable to it”,
  • “Implement a credit control and debt collection policy”,
  • “Send out regular accounts, develop a culture of payment, disconnect the supply of electricity and water in appropriate circumstances, and take appropriate steps to collect amounts due”, and
  • “For the sake of service delivery … do everything reasonable to reduce amounts owing”.

You have, in the Court’s words “a full-plated panoply of mechanisms enabling efficient debt recovery” – use them to stop arrears building up in the first place.

For more information, contact our professional team on 041 501 9800.

Credit: LawDotNews

 

PROPERTY SELLERS: DON’T PAY “FUTURE RATES”

 

“Cause they told me everybody’s got to pay their dues
And I explained that I had overpaid them” (Sixto Rodriguez in ‘Cause’)

Before you as seller can transfer your property to the buyer, you must have a clearance certificate from your local municipality confirming that you have paid in full all rates and taxes, services etc due to it on the property.

What happens though when the municipality refuses to issue the clearance certificate until you have paid not only rates currently due, but also future rates i.e. rates payable by the buyer after transfer as new registered owner?  If you are forced to pay, you will be left with a claim against the buyer and that could well mean dispute and delay.

But now here’s good news for you from a recent SCA (Supreme Court of Appeal) decision.

At issue – a R2.28m rates bill paid under protest

  • A municipality presented a seller with a rates account of R2,281,014-68 in terms of its rates policy which required it to recover all rates due for the seller’s “remaining financial year”.
  • The seller said it only owed R1,2m but it was forced to pay – with reluctance and “under protest” – the whole amount due in order to get the clearance certificate. It then sued the municipality for return of the R1,066,532 “overpayment”.
  • On its interpretation of the relevant legislation, the Court held that the municipality’s policy on future rates was inconsistent with the Rates Act, and therefore void. The seller had therefore overpaid, and the municipality must repay it, together with interest and costs.

For advice, phone us on 041 501 9800.