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Property owners

550 105 Prevance - Bridging Finance South Africa

What is SPLUMA? And How it Affects Property Owners

prevance.png1. What is SPLUMA?
SPLUMA is “The Spatial Planning and Land Use Management Act 16 of 2013” and came into operation on 1 July 2015.
In 2000 the entire country was demarcated into wall to wall municipalities.  The result being that all land in South Africa is included in a municipality and municipalities are required to extend their planning and land use management beyond the traditional township areas.

2. What is the purpose of SPLUMA?

SPLUMA sets the principle that all land development applications must be submitted to the municipality as the authority of first instance – without actually prescribing in detail how spatial planning and land use management issues are to be dealt with within municipal areas.
SPLUMA seeks to promote consistency and uniformity in procedures and decision making for all land development within its authority.

3. What is the effect of SPLUMA on the local authorities?
SPLUMA is a national framework act that requires provincial legislation to enable municipalities to enact spatial planning and land use management by-laws.  The municipal SPLUMA by-laws prescribe how land use applications and appeals are dealt with.
Municipalities in Mpumalanga all basically have similar spatial planning and land use management by-laws.  These by-laws have many requirements and procedures regarding spatial planning and land development.  One such requirement is that municipalities are required to issue SPLUMA certificates before a property can be registered or transferred in the deeds office.

In order for the municipality to issue a SPLUMA certificate the following needs to be in place:

• All funds due by the owner in respect of the land has been paid
• All contravention penalties must have been paid
• All compliance directives must have been complied with
• The land and buildings constructed on the land unit need to comply with the requirements of the land use scheme
• All conditions of approval of any land development application must have been complied with.

The importance of these requirements should not be underestimated as non-compliance in any of the listed conditions will result in unnecessary delays in the issuing of a SPLUMA certificate by the Municipality, and thus a delay in the transfer and registration of a property.  In certain instances, these delays could result in being a deal-breaker for purchase agreements!

4. Are the municipalities geared for implementing SPLUMA?
No, the implementation of SPLUMA is not without problems and challenges.
As the respective by-laws are being implemented by municipalities various shortcomings have been identified in the legislation that will require the by-laws to be amended in future.
Not all municipalities have access to updated property data, aerial photography and GIS systems that will affect the efficiency of the municipal officials and the issuing of SPLUMA certificates.
The bulk of the Mpumalanga SPLUMA municipal by-laws are incomplete as it lacks sections for the granting of real rights (specifically servitudes) in general.
It is yet to be seen how development of state land, tribal areas and farmland is to be authorised by the municipality.

5. How does SPLUMA affect me as property owner?
SPLUMA affects all properties: commercial, industrial, residential, sectional title, share block, tribal, farm, etc.  State land is also subject to the SPLUMA legislation.

Most property owners will not be aware of the requirements of SPLUMA and it will have little affect on them as municipalities do not actively police and enforce compliance in terms of municipal requirements.  However, the SPLUMA requirements affect all properties as a municipal SPLUMA certificate is required by the Registrar of Deeds prior to a land unit being transferred / registered in the deeds office.  Although most transactions will be as a result of sale agreements, certificates will also be required for the transfer of properties from a decease estate or sale of property in execution, or any other instance where a property needs to be transferred or registered in the deeds office.

6. How do I ensure that my property is SPLUMA compliant?
To be SPLUMA compliant the owner must ensure that the following is in place:

• Approved building plans for all buildings – including swimming pool;
• The use of the property has to be in accordance with the municipal zoning. For example, if your property is residentially zoned, operating a guest house from the property would be a violation of the bylaws;
• Ensure that there are no encroachments over the building lines and property boundaries.  If you are uncertain regarding the encroachments of building lines and property boundaries, a professional land surveyor should be consulted.

7. What must I do if my property is non-compliant in respect of the following?
It is advisable that property owners seek the advice of knowledgeable property professionals to assist them with the ever changing and complex legislation involving properties and property transfers specifically.

• Building plans:
Appoint an architect or draftsman to prepare the necessary building plans for lodgement with the Municipality.

• Zoning:
Apply for the property to be rezoned.  Although the procedure is complex property owners can lodge rezoning application themselves, or have a town planner or land surveyor lodge the application on their behalf.

• Encroachment
In the event of an encroachment it is advisable that a land surveyor be consulted to confirm and quantify the encroachment.  There are various options in dealing with encroachments, including:

a) Structures to be demolished or relocated;
b) Servitudes to be registered for areas of encroachment;
c) Portions of properties to be purchased or swopped;
d) Building line relaxation can be applied for;
e) The Mbombela bylaw makes provision for the Purchaser to conclude a written agreement with the municipality regulating the rectification of the contravention whereupon the municipality will issue the SPLUMA certificate in order for the transfer to proceed irrespective of the contravention.  However, this is not the case in all municipalities.

8. How are SPLUMA certificates applied for?
Each Local Municipality has different requirements due to different by-laws.  In order to apply for SPLUMA certificates the respective municipalities have different requirements, for example:

• MBOMBELA
– Application form
– Affidavit by registered owner

• THABA CHWEU
– Application form
– Affidavit by registered owner

• GOVAN MBEKI
– Application form
– Affidavit by registered owner
– Land use rights certificate
– Occupation certificate

• EMALAHLENI
– Application form
– Issued rates clearance certificate
– Occupancy certificate
– Site visit

• STEVE TSHWETE
– Application form
– Affidavit by registered owner
– Occupancy certificate not older than three months
– Site visit

• EMAKHAZENI
– Application form
– Issued rates clearance certificate
– Site visit

9. Must I provide my Conveyancer with a SPLUMA certificate?
No, it is the responsibility of the Conveyancer to attend to the administration involved in obtaining the SPLUMA certificate from the municipality. The Conveyancer will provide you with all the necessary documentation for signature and inform you of the application costs involved.

The municipality may refuse to issue a SPLUMA certificate if there is uncertainty regarding encroachments of building lines and property boundaries.  In such cases it would be advisable for an owner or conveyancer to obtain a certificate from a land surveyor prior to requesting a certificate from the municipality.

10. How is SPLUMA enforced in the deeds office?
From 1st of June 2017 the Registrar of Deeds Mpumalanga has indicated that no transfer of property will be registered without a certificate issued by the relevant municipality indicating that the SPLUMA requirements have been complied with.

See original article.

152 75 Prevance - Bridging Finance South Africa

Suspensive Conditions in a Deed of Sale: Know Your Obligations

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Imagine signing a deed of sale for your dream house and later discovering that the contract lapsed because you obtained bond approval one day too late. The situation could be worsened if the Seller receives a better offer for the house and accepts that better offer.

If a deed of sale is made subject to a suspensive condition, it will lapse if such condition is not fulfilled in time. This was confirmed in the case of Marais v Kovacs Investments 724 (Pty) Ltd [2009] 1 All SA 174 (C) (hereinafter referred to as “the Marais case”). There is then no contract for the sale of the property between the two parties and the Seller can sell the property to another purchaser.

Examples of suspensive conditions are obtaining bond approval before a certain date, or the sale of the Purchaser’s current property before a certain date. It is very important for both the Seller and Purchaser to take note of the wording of these conditions and ensure that they understand them.

The following is an example of the wording of a suspensive condition relating to a bond, also sometimes referred to as a “bond condition”:

This Deed of Sale is subject to the Purchaser obtaining bond approval from a financial institution for the amount of R1 500 000 before 2 December 2013, failing which this agreement will lapse.

In the above example, if only R1 400 000 is approved before 2 December 2013, in other words R100 000 less than the required amount, then the condition is not met and the contract will lapse. Similarly, if a bond is approved for R1 500 000 but only on 5 December 2013, then the condition is not met in time and the contract will lapse, as was decided in the case of Meyer v Barnardo and another 1984 (2) SA 580 (N).

The parties can however agree to extend the time during which the suspensive condition must be fulfilled. Such extension must be in writing and signed by both the Seller and Purchaser as per the requirements of the Alienation of Land Act 68 of 1981. It must also be done before the time limit of the suspensive condition expires. In the above “bond condition” clause example, this would mean that the parties would have to sign the extension before 2 December 2013 to prevent the Deed of Sale from lapsing. In the Marais case the court held that even if the suspensive condition had been inserted in the contract for the exclusive benefit of the Purchaser, the Purchaser would have had to communicate his intention to waive the requirement before it lapsed.

In the Marais case the parties entered into a written agreement of sale with a suspensive condition that a bond in the amount of R10 149 072 needed to be obtained by 15 August 2005. The Purchaser, however, only obtained a mortgage bond in the amount of R9 650 000, which was granted on 2 August 2005. The respondent’s attorneys argued that the suspensive condition had been substantially fulfilled because the shortfall was, in their opinion, only a “minor shortfall” and therefore an insignificant amount compared to the purchase price. The court did not agree with this and found that it could not be said that the parties intended the suspensive condition to be fulfilled in any way other than what was expressly stipulated in the Deed of Sale. The court found that the contract had therefore lapsed.

If a suspensive condition will not be fulfilled in time, rather take the necessary precautions beforehand to avoid a lapsed Deed of Sale. We advise that you contact a professional for advice in this regard.

Reference list:

Kontraktereg, UNISA 2004
Self-Study Conveyancing Course for Attorneys, Gawie le Roux, 2013
Alienation of Land Act 68 of 1981
Marais v Kovacs Investments 724 (Pty) Ltd [2009] 1 All SA 174 (C)
Meyer v Barnardo and another 1984 (2) SA 580 (N)
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).

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