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Selling – is your house in order? // new requirements for selling your house in terms of spluma
21 August 2015  | Marietha Farrell
 

Recently, the South African Government implemented the Spatial Planning and Land Use Management Act, Act 16 of 2013 (In short referred to as “SPLUMA”.).  SPLUMA has various implications for land use and planning in general, as same was implemented for the sole purpose of aligning and consolidating several different Acts of Parliament pertaining to land and planning, including the Development Facilitation Act and the Physical Planning Act.

Relevant for purposes of this discussion, and closer to home, it authorises and requires local municipalities to manage and amend its own internal land use system, by amongst others implementing local by-laws.  Mbombela Local Municipality recently published it’s bylaw, effective from the 10th of July 2015.

SPLUMA and the Mbombela Local Municipality bylaw have a wide variety of implications for the residents of the Mbombela Local Municipality. The said bylaw provides for land development applications, township establishment, re-zoning of land and even for the removal of restrictive title conditions.  It also contains provisions aimed at ensuring that land owners are in compliance with the township development scheme. – In this regard one of the more notable provisions is the requirement for the issue of a section 70 certificate.

Section 70 of the bylaw requires that any person who wishes to transfer land situated within the geographical area of the Mbombela Local Municipality must be in possession of a section 70 certificate before the property may be sold or otherwise transferred to a new owner thereof.  In order to obtain the certificate the applicant must prove certain facts to the satisfaction of the Municipality, which are discussed herein below:

(a) - That funds due by the transferor in respect of land, have been paid

Although the by-law is not very clear in this regard we understand that the funds referred to, include any outstanding payments due to the Municipality, for example service contributions payable with respect to the development of land.

(b) - proof of payment of any contravention penalty or proof of compliance with a directive contemplated in Chapter 9 of the by-laws

These fines are prescribed by SPLUMA and the by-laws and pertain to contraventions of the act and by-laws, e.g. failure to comply with the land use scheme. 

It further requires that proof be submitted of compliance with any directive issued by the municipality as provided for in Chapter 9 of the by-laws.  In short, chapter 9 authorizes the municipality to issue orders (directives) to land users, to regulate unlawful land usage e.g. conducting business activities on a residential property without the necessary consent.

(c) - proof that the land use and buildings constructed on the land unit comply with the requirements of the land use scheme, unless the new owner has concluded a written agreement with the Mbombela Local Municipality regulating the rectification of the contravention;

This is arguably the most challenging and significant condition.  This requirement demands that unauthorized usages of the property (for example the conduct of a business activity on a property zoned for residential use) will need to be identified and rectified prior to transfer.

You will also need to be able to show that all buildings erected on the property is in compliance with approved building plans.  If this is not the case the new owner of the property will be required to enter into an agreement with the Municipality in order to address the contravention and correct it.

(d) - proof that the conditions of approval that must be complied with before the transfer of erven have been complied with;

This requirement means that you will need to prove that you complied with any conditions that were attached to a development approval that was submitted with respect to the property, including conditions pertaining to approvals for second dwellings on a property or the operation of a guest house.

(e) - if the land unit arises out an approved land development area, that all the further requirements contemplated in section 68(2) have been met;

This requirement will become applicable to land that was the subject of a land development application (new townships established in terms of SPLUMA by a property developer) and will require proof that the development conditions have in fact been complied with. 

Unfortunately some of the abovementioned requirements still need further clarification, and we trust that these requirements will become more evident through the application of the bylaw and as time passes.

In conclusion, the above requirements will have a big impact on the process of selling your property, and for this reason we suggest that prospective sellers should take a pro-active approach and assess their properties to address any unexpected pitfalls. Likewise estate agents, valuators financial institutions and other role players should be aware of the potential impact of this new requirement and advise their clients accordingly.

Should you require more information regarding the above, please do not hesitate to contact our offices.

 
 
 
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Tags: Property