Property sellers should not rely on the “blind protection” of the voetstoets clause if they don’t have approved building plans.
There is a growing legal shift away from the protective blanket of voetstoets for second-hand property sellers with illegal or unapproved structures.
The courts now place the responsibility of ensuring that there are approved plans for the property directly on the seller, and while the voetstoets clause remained valid within the realms of common law and was a standard provision in sales agreements, it no longer offered blanket ‘as is’ cover, nor the guarantee of a smooth property transaction.
Tightening of legal requirements
Unapproved building plans were now the biggest headache in property transactions today owing to the tightening of legal requirements around approved plans following the promulgation of the updated SANS 10400 building regulations. There is a strict process to follow in terms of extensions, alterations and the building of all structures on a normal freehold property.
Buyers and their banks now almost always want plans of the property, without which sellers run some serious risks. Aside from the legal implications, getting illegal extensions approved could include lengthy delays in the transfer process. Then there is the risk of the banks withdrawing the financing of the property. The banks are less and less willing to finance a property purchase unless provided with registered plans. If it comes to light prior to registration that there’s an illegal structure on the property, and even if the seller is genuinely unaware that there are no plans for it, the conveyancers cannot just retain funds on registration of transfer since, by law, the full proceeds on registration are trust funds and belong to the seller. Banks are aware of the risks.
Courts finding in favour of purchasers
Sellers’ voetstoots arguments and assertions that they were not aware of the absence of plans or illegal constructions were now regularly being overruled by the courts. The trend is for the courts to find in favour of the purchasers, with the reasoning that they are entitled to assume that all legal and municipal requirements have been adhered to.
Ignorance no longer an excuse
The introduction of a seller’s declaration by the Estate Agency Affairs Board (EAAB) in recent years means that sellers are now routinely questioned about approved plans. Right up front, along with the signing of the mandate, sellers have to a complete a declaration regarding the existence or lack of approved plans. It is also something that prudent estate agents investigate when they take mandates, as it is not an excuse to say they did not know.
The most common problems experienced by conveyancing attorneys and estate agents today include building line transgressions, with particular reference to carports and entertainment areas built on to boundary walls, and building over servitudes. People also regularly build over manholes, drains and gulleys, and enclose balconies in apartment blocks without the requisite permission.
Purchasers also need to watch out for sectional title units that had been extended, since approval was required from the body corporate as well as the municipality, and plans had to be registered with the surveyor general and the Deeds Office.
In circumstances where plans were not available, the parties would have to come to an agreement to have “as built” plans drafted and submitted in order for the transaction to proceed. However, the seller ran the risk of the purchaser wanting to pull out of the sale.
If the municipality was unable to approve “as built” plans, remedial action would be required and the purchaser would have to be compensated with regard to the costs of relocating or replacing the offending structure.
Safekeeping of plans
Home owners are also responsible for the safekeeping of their own plans. It is therefore in all property owners’ best interests to have municipal-approved plans which will save time and pre-empt problems down the line when the time comes to sell.
As a rough guide, the cost of approved plans for a basic three-bedroom house is about R10,000, provided there were no restrictive title deed conditions. Compare this cost with that of a failed transaction and that once a sale falls through, a property quickly gets a stigma attached to it, so the chances are it will struggle to sell.. No matter which way you look at it, it makes sense to get approved plans as soon as possible.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)