Sellers should not solely rely on the protection of the “voetstoots” clause if they don’t have approved building plans. It seems as if there is a growing legal shift away from the protection the voetstoots clause offers for pre-owned property sellers with illegal or unapproved structures.
The Courts place the responsibility of ensuring that there are approved plans for the property, directly on the seller and while the “voetstoots” clause remained valid within the realms of common law it no longer offers the protection of simply selling “as is”, nor does the voetstoots clause guarantee a smooth property transaction.
Unapproved building plans are the biggest headache in property transactions 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 request plans of the property, without which sellers run some serious risks. Besides the legal implications, getting illegal extensions approved could include lengthy delays in the transfer process ad financial consequences.
If prior to registration it is found 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 willy-nilly retain funds on registration of transfer for remedy since, by law, the full proceeds on registration are trust funds and belong to the seller.
Banks are aware of the risk associated therewith, especially as the property constitutes their security, and therefore you run the risk of the banks withdrawing their financing of the property without being provided with the building plans.
The seller could also be forced to relocate or demolish the offending structure, which can lead to excessive costs and could also lead to the purchaser requesting a reduction of the selling price, in terms of the “Actio quanti minores”.
In the case of Banda and Another v Van der Spuy and Another, the buyers challenged a defective roof. The sellers’ voetstoots arguments and assertions that they were not aware of the absence of plans or illegal constructions are were overruled by the court and in future will in most instances also be rejected by the courts. The courts often find in favour of the purchasers, with the reasoning that they are entitled to assume that all legal and municipal requirements have been complied with.
The introduction of a seller’s declaration by the Estate Agency Affairs Board (EAAB) in being that sellers are now almost always questioned about approved plans. In the initial stages of the transfer along with the signing of the mandate, sellers have to a complete a declaration regarding the existence or lack of approved plans. It’s also something that prudent agents investigate when they obtain mandates, resulting in the excuse that they weren’t aware of the fact that there were no building plans will surely be rejected.
The seller runs the risk of the purchaser maybe withdrawing from the sale. It is also the bank’s discretion as to whether to proceed with financing or not, but it’s very likely that the bank will withdraw and or decline the financing. Furthermore if the municipality is unable to approve “as built” plans, the 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.
It is of utmost importance to safeguard your building plans. It’s therefore in all property owners’ best interests to have municipal-approved plans which will save time, headaches and future cost, when they intend to sell, and also perhaps obtain a copy of such approved building plans for themselves.