Does a seller of a property produce municipal plans
Category Advice
Although there is no obligation on a Seller to produce Municipal Plans which reflect that all the buildings on the property have been approved by the Local Authority, this becomes a contentious issue in a situation where the Purchaser, during the transfer process becomes aware that there are no approved plans for whole or part of the property. This normally results in a lengthy delay in the finalisation of the transfer.
What is the law in regard to this issue? For a long time it was regarded that the Seller was protected by the provisions of the voetstoets clause, and if the Seller was not aware of the lack of plans and the Purchaser did not request copies, the Purchaser was obligated to take transfer of the property as is.
This was the situation up until three years ago, when it was held by the Court in an Eastern Cape matter that it was an implied term of all sales of immovable property that plans for buildings were properly approved.This judgement was subsequently overturned by the Supreme Court of Appeal, which meant that the protection afforded to the Seller by the voetstoots clause came into effect again.
Many estate agencies have a clause in their Agreements in terms of which the Seller warrants the Municipal Plans are properly in place. If it is found at any stage after signature of the Sale Agreement that there are no/incomplete plans, then the Seller will be bound to the Purchaser by such a warranty and will have to arrange for the drafting and approval of these plans prior to registration of transfer.
In conclusion, although Municipal plans are required in terms of the National Building Regulation Act, in regard to the contractual relationship between a Seller and a Purchaser, the Purchaser can only insist on properly approved plans if there is a clause to that effect in the Sale Agreement.
Many estate agencies have a clause in their Agreements in terms of which the Seller warrants the Municipal Plans are properly in place. If it is found at any stage after signature of the Sale Agreement that there are no/incomplete plans, then the Seller will be bound to the Purchaser by such a warranty and will have to arrange for the drafting and approval of these plans prior to registration of transfer.
PLEASE NOTE: WHEN APPLYING FOR A BOND, MOST BANKS INSIST ON UPDATED AND APPROVED MUNICIPAL PLANS.
Author: Meumann White
