Few people appreciate the complexities that can arise when a property, on which minor or substantial 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 on properties. Some leniency is afforded to "minor building works", as defined in that Act, in which instances a municipality may be approached for written consent that
formal approval need not be obtained. This is, for example, the position with regard to wendy houses smaller than 5 m², pergolas, carports and the like. (For more information in this regard, read here:
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 in the property existing at the time of the sale, patent or latent (not visible). The exceptions hereto are instances where the seller fraudulently conceals the existence of latent defects that he was aware of.
In such instances, the seller remains liable for damages that a purchaser may claim. (Note that the position is somewhat altered if the Consumer Protection Act applies to the agreement between the parties, typically where the seller is a developer.)
Our law considers that a property on which buildings were erected without municipal approval, is a property with a latent defect. As indicated, a voetstoots clause ordinarily covers latent defects and a seller is not without more liable in the event of selling a property with unauthorised building works. However, if the seller knows that there are no plans - usually 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 absence of approved plans may trigger a municipality to refuse further renovations a purchaser may have planned or, at worst, a finding that the illegally erected structure be demolished.
A defect that is of a significant nature and which affects the use and enjoyment of the property, allows the purchaser certain 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 of the defect. Other remedies include the reduction in purchase price or a claim for damages, depending on the gravity of the defect and the circumstances.
If you are selling your home or looking to purchase a new residence and you are concerned about the status of building renovations, let us assist you in the process.
Contact Martin Sheard at STBB Claremont – 021673-4700.