Property Archives - Smuts & Co Attorneys

CAN I OBTAIN FINANCING IF I DON’T OWN IMMOVABLE PROPERTY AS SECURITY?

Fri, 29 Jun 2018 09:00:20 +0000

The article gives a brief overview of what a notarial bond is, the requirements that need to be complied with to register a notarial bond and give tips regarding clauses that will prove to be useful in a notarial bond. It also deals with the situation where a debtor disposes of an asset listed in a notarial bond, contrary to the provisions thereof.

A very useful way of obtaining financing to start a new business, is to register a notarial bond over the movable property belonging to the business. For instance, notarial bonds are regularly utilised in transport companies – a notarial bond is registered over the vehicles forming the core of the business, but the vehicles do not need to be in the physical possession of the creditor, thus the business can fully operate.

What is a notarial bond?

A notarial bond is a general or special bond where the movable assets of a debtor are used as security for a debt. In terms of the notarial bond, the debtor undertakes to pay his debt towards the creditor, failing which the creditor will be entitled to sell these movable assets and to utilise the proceeds thereof to satisfy his claim against the debtor. There are 2 types of notarial bonds:

General notarial bond: all the movable assets on the debtor’s property serves as security for the debtor’s debt.
Special notarial bond: specific movable assets identified in the bond will serve as security for the debt.

How does a notarial bond differ from a pledge?

A pledge requires the delivery of the movable asset pledged. A notarial bond does not require the delivery of the movable assets identified in the bond, but in terms of section 1(1) of the Security by Means of Movable Property Act 57 of 1993, the movable property listed in the notarial bond will be deemed to have been pledged to the creditor as effectually as if it had been delivered to the creditor. The fact that the creditor is deemed to be in possession of the property thus places him on equal footing with that of a pledgee. The creditor, upon registration of the notarial bond in the deeds registry, acquires a real right of security in the movable property specified in the bond.

Requirements:

Existence of a principal debt;
Assets which serve as security must be movable, including corporeal and incorporeal assets.

Corporeal assets include furniture, vehicles, the goods of a business, animals and the future offspring of animals and stock in trade.

Incorporeal assets include an unregistered long-term lease of immovable property, a short-term lease of immovable property, a liquor license, a water use license, site permit, shares in a company, goodwill of a business, book debts etc.

What if more than one creditor uses the same asset as security for their debt?

A bond which was registered first enjoys priority over a bond registered thereafter.

Important clause to insert in the bond:

To prevent the debtor from disposing of assets which serve as security in terms of the notarial bond, a clause should be inserted disallowing the debtor to sell, alienate, dispose of, transfer or permit the removal of the asset from the debtor’s place of residence or place where he carries on business, without the prior written consent of the creditor.

What happens if a debtor disposes of the asset identified in the notarial bond, contrary to the stipulations in the notarial bond?

The creditor will be able to apply for provisional sentence summons against the debtor, provided that the notarial deed meets the requirement of being a liquid document. A liquid document is a document which indicates, without having to consult extrinsic evidence, an acknowledgement of debt, of which the amount is easily determinable. A notarial bond will in general qualify as being a liquid document.

A creditor will also be able to claim back an asset which has been sold, contrary to the provisions of the notarial bond, to a bona fide third party, from such third party. The reason for that is the fact that a notarial bond, which has been registered in the Deeds Registry, creates a real right, which is a right that attaches to property, rather than a person.

It is not easy to obtain credit in the economic environment in which our country currently finds itself. However, there are ways to get your business off the ground and registering a notarial bond over the property of your business is a recognised method of securing your business’ debt. If notarial bonds can be utilised more frequently, it can help a lot of new businesses get the financing they need to buy equipment, vehicles and machinery necessary for the operation of the business.

Reference List:

Explanatory Notes Part 1: Course in Notarial Practice, compiled by Gawie Le Roux, Erinda Frantzen and Ilse Pretorius
The South African Notary, sixth edition, M J Lowe, M O Dale, A De Kock, S L Froneman, A J G Lang

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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DAMAGE TO PROPERTY

Fri, 29 Jun 2018 08:59:00 +0000

What happens when your property has been purposefully damaged, especially during an altercation?

Uber car torching

During the road closures by meter taxis in Johannesburg on October 27 2017, two Uber drivers’ cars were set alight. A total of thirty meter taxi drivers were arrested for traffic disruption on the R21 and R24 highways of Johannesburg, and further investigations were underway as to determine how the cars were torched during the protest. With the meter taxi drivers being responsible for the flames, and assaulting an Uber passenger before leaving with her belongings. There have been ongoing violent feuds between Uber, meter taxis and taxi drivers, and in one instance, an Uber passenger was stabbed in the face, allegedly by a taxi driver. Two cars, believed to be Uber vehicles, were petrol-bombed earlier in September.

Malicious damage to property

Damaging property belonging to someone else is common – someone’s car door could fling to bump yours, the neighbour’s son may swing a cricket ball towards your kitchen window. These are mistakes which don’t normally require the assistance of authorities. Malicious damage to property is the intentional and unlawful vandalization of property or belongings of another person. As a criminal offence in South Africa, damage to property extends over to the physical harm of pets, and the vandalization of cars, furniture and other tangible items which can cause financial setbacks.

Suing for malicious damage for property follows reporting the incident as soon as possible. It is advised to keep records, such as photographs, names of witnesses, time of incident, and most importantly, financial records of repairing or replacing said property or belongings. It is important to note that in cases where property is damaged in an act of self-defence, or protecting property, the claim for malicious damage to property will not be a successful one.

References:

Criminal Procedure Act 51 of 1977. (1977). [ebook] p.194. Available at: http://www.justice.gov.za/legislation/acts/1977-051.pdf [Accessed 31 Oct. 2017].

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CO-OWNING PROPERTY WITH SOMEONE ELSE: THE UPS AND DOWNS

Wed, 02 May 2018 12:47:19 +0000

What is co-ownership?

Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the single property. The different shares can be recorded and registered in the title deeds by the Deeds Office.

The benefits

On paper, it’s a great idea. For starters, the bond repayments and costs of maintaining the home are halved. However, there can be problems and although not every friendship or relationship is destined to disintegrate, there does often come a time when one of the parties involved wants to sell up and move on to bigger and better things.

The risks

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property. For instance, one of the co-owners fails to contribute his share of the finances as initially agreed, resulting in creditors such as the bank or Body Corporate taking action to recover the shortfall.

Having an agreement

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations if they should decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important that, when the agreement the co-owners entered into does not help them solve disputes, certain remedies are available to them.

The agreement should address the following issues:

In what proportion will the property be shared?
Who has the sole right to occupy the property?
Who will contribute what initial payments to acquire the property.
Who will contribute what amounts to the ongoing future costs and finances.
How the profits or losses will be split, should the property or a share be sold?
The sale of one party’s share must be restricted or regulated.
The right to draw funds out of the access bond must be regulated.
A breakdown of the relationship between the parties.
Death or incapacity of one of the parties.
Dispute resolution options before issuing summons.
Termination of the agreement.

Reference:

http://igrow.co.za/co-ownership-of-property-what-you-need-to-know/
http://www.privateproperty.co.za/advice/property/articles/the-pitfalls-of-property-co-ownership/5046
http://www.jgs.co.za/index.php/property/owning-prop-jointly-the-do-s-and-dont-s

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CAN TRUSTEES BAN YOUR PET IN A SECTIONAL TITLE SCHEME?

Wed, 02 May 2018 12:08:45 +0000

Problems around the ownership of pets are common amongst owners of sectional title properties, but while laws may be imposed by the trustees of the homeowners’ associations, the requirement for a reasonable approach is entrenched in the very laws which govern how a sectional title scheme should be managed.

Where the trustees have reasonably, after following due process and considering all relevant factors, withdrawn their consent to keep a pet, the owner concerned is then not entitled to continue keeping that pet in the scheme.

This is according to the Prescribed conduct rule 1 in Annexure 9 of the Sectional Titles Regulations which deals with the keeping of pets, including reptiles or birds.

It states:

“1. (1) An owner or occupier of a section shall not, without the consent in writing of the trustees, which approval may not unreasonably be withheld, keep any animal, reptile or bird in a section or on the common property.

(2) When granting such approval, the trustees may prescribe any reasonable condition.”

The phrases, “may not unreasonably” and “may prescribe any reasonable”, clearly seek to assist in the creation of harmony amongst a community living side by side in a sectional title development.

These regulations exist to protect the pet owner from unreasonably strict rules, and equally, they must confer on the other owners the right to a nuisance-free and peaceful environment. This means that both parties need to consider each other’s needs.

This consideration, in granting or refusing consent, will be central to inquiry: will it unreasonably interfere with other’s rights to use and enjoy their units; and which conditions would be appropriate in these circumstances to ensure that the risk of nuisance is reduced to a reasonable level?

For this reason, owners or occupiers can only keep pets in a section or on any part of the common property with the written consent of the trustees. However, the trustees cannot unreasonably withhold that permission. An absolute prohibition to keep a pet could be considered unreasonable and if consent to keep a pet is unreasonably withheld, the owner can take the matter to court.

The trustees must furthermore, base their decision on the facts and circumstances of the particular case. The decision to either grant or refuse consent should be recorded in the minutes of the trustee’s meeting, giving reasons that illustrate they have applied their minds to the particular set of facts.

An example of a court case which arose from a dispute regarding permission to keep a pet in a sectional title development was Body Corporate of The Laguna Ridge Scheme No 152/1987 v Dorse 1999 (2) SA 512 (D), in which it was held that the trustees are obliged to individually consider each request for permission to keep a pet, and to base their decision on the facts and circumstances of each particular case.

A further extract from this case pointed out that trustees are not entitled to refuse an application on the basis that they are afraid of creating a precedent. The trustees were, in this case, found to have been grossly unreasonable and have failed to apply their minds when they refused the Applicant permission to keep a small dog.

The question of the reasonableness of the actions of the trustees, in granting or withholding permission and setting conditions, will turn on the nature of the pet concerned and the circumstances of the scheme. In dealing with any application for permission to keep a pet, the trustees should consider what type of pet it is, and whether there are already other similar pets at the scheme.

It is unlikely that any action by the trustees to remove a ‘companion animal’ or ‘service animal’, such as a guide dog owned by a blind or partially sighted owner, would be held to be reasonable in the absence of a clear nuisance caused by the animal. The fact that a person sometimes forms an extremely strong emotional tie with their pet could also be an important consideration when the trustees decide whether or not to grant permission.

The trustees are not, however, powerless in situations where the conditions of permission to keep a pet are not being met. The trustees can withdraw permission if it is reasonable to do so. Examples include if the pet is causing a nuisance to other owners or occupiers (e.g. barking persistently), or the pet is considered dangerous to other owners or occupiers.

Where the trustees have reasonably, after following due process, withdrawn their consent to keep a pet, the owner concerned is then not entitled to continue keeping that pet in the scheme. However, the enforcement of this could be tricky for the trustees. The body corporate is not entitled to forcibly remove a pet from an owner’s possession. This can only be achieved by a court order, if – for example – there are too many dogs being kept in an inadequate space, the trustees can get the assistance from the local SPCA who can be contacted to come to the scheme to do an inspection in loco. If it is justified, they will implement the necessary legal steps to have the dogs removed.

Careful consideration and the application of the principles as set out in the rules of the scheme and the above-mentioned regulations will lead not only to peaceful co-existence, but also healthy growth in property values for the developments implementing such approach. A harmonious board of trustees results in a happy community, which in turn will ensure a good name for any development.

Reference:

Conduct Rule 1 in Annexure 9 of the Sectional Titles Regulations
Permission to Keep Pets | Paddocks
https://www.paddocks.co.za/paddocks-press-newsletter/permission-to-keep-pets/
Body Corporate of The Laguna Ridge Scheme No 152/1987 v Dorse 1999 (2) SA 512 (D)

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IMPORTANT STEPS FOR THE TRANSFER OF PROPERTY

Wed, 04 Apr 2018 15:10:21 +0000

The transfer process can take up to three-months, sometimes longer. There are different steps involved in the transfer of a property, these include:

Instruction.

A conveyancer receives the instruction to transfer the property.

Communication.

The conveyancer communicates with the various role-players involved in the transfer process, such as the seller, purchaser, transfer and bond attorneys, municipality, bank, South African Revenue Service (SARS).

Collection.

Certain information and documents are required, such as the agreement of sale, deeds office search, existing deed, bond cancellation figures from the bank and so on. The conveyancer should continuously report to the various role-players about the progress being made.

Drafting and signing.

As soon as all the information and documents have been collected, the conveyancer will draft the transfer documents and request the seller and purchaser to sign them. These transfer documents will include a power of attorney and various affidavits.

Finances.

Financial arrangements include requesting an advance payment for the conveyancer’s interim account for certain expenses, requesting the bank guarantee, collecting the purchase price or deposit and so on.

Transfer duty.

Obtaining a transfer duty receipt from SARS, confirming that the tax relating to the transfer of the property has been paid by the purchaser.

Clearance certificate.

Obtaining a clearance certificate from the municipality, confirming that all amounts in respect of property have been paid for the last two years.

Prep.

The conveyancer prepares for lodgement (submission) of the deed of transfer and other documents necessary for registration at the deeds office.

Registration.

Once the deed of transfer and other documents have been lodged it, takes the deeds office about 7 – 10 working days to examine these documents. If the deeds office is satisfied that the requirement for the transfer of property has been met, the deed of property is registered. The conveyancer will notify the various role-players of the registration.

Accounts.

Once registered, the conveyancer makes the necessary calculations and payments relating to the sale, for example, the estate agent’s commission, purchase price and so on. The conveyancer’s final account is also drawn up and sent to the purchaser and the seller for payment.

Having an experienced and expert conveyancer is extremely important to ensure that the transfer of property takes place quickly and efficiently.

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WHAT IS A TITLE DEED?

Wed, 04 Apr 2018 15:08:03 +0000

If you are planning to buy a new property, you will need to get the title deed transferred into your name to prove that you are the owner of the property. You will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

The name of the existing owner as well as the previous owners.
A detailed property description which includes size.
The purchase price of the property paid by the existing owner.
Conditions applicable to the zoning, use and sale of the land.
All real rights registered in respect of the property.

The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

References:

https://www.westerncape.gov.za/service/title-deeds-proof-property-ownership

https://www.rocketlawyer.com/article/whats-the-difference-between-a-roperty-deed-and-a-title-ps.rl

http://www.conveyancing24.co.za/

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VIGILANTLY OR CRIMINAL? TAKING THE LAW INTO MY OWN HANDS

Wed, 04 Apr 2018 15:01:42 +0000

If someone gets something of theirs stolen, they might be tempted to go take it back, by force if necessary. However, that would be considered illegal and would put your belongings back into the hands of the thief.

Mandament van Spolie

The Mandament van Spolie is an extraordinary, quick and robust remedy for the restoration of possession. Its purpose is to restore possession to the person who was deprived, and is based on the principle that no man should take the law into his own hands.

Since the object is to restore possession to the applicant, the court will not consider any defences based on the respondent’s rights of ownership. Therefore, neither the applicant nor the respondent need to prove ownership. Only the requirements listed below need to be proven. Based on this unique characteristic of the Mandament van Spolie this remedy can be used by a thief or any other person without the right of ownership. The Mandament van Spolie is a final order and is appealable. The respondent, however, may continue with other proceedings if he is the owner.

The requirements for this remedy were set out in two important decisions that are still relevant in this regard, namely Nino Bonino v De Lange 1906(T) and Yeko v Qana 1973(A).

Proof that the applicant was in peaceful and undisturbed control of the property. The first requirement means that the applicant had control over the property in question. For purposes of the spoliation remedy this control must have existed “peacefully and undisturbed” for a period long enough, and in a manner stable enough, to qualify any unlawful disturbance of the peace.
Proof that the respondent took or destroyed that control by means of unlawful self-help or spoliation. The second requirement for the spoliation remedy is that the existing peaceful and undisturbed control must have been unlawfully spoliated by the respondent.

Conclusion

The spoliation remedy is aimed at preserving peace and order in the community. People cannot be permitted to circumvent the remedy by contract. Parties to a contract cannot agree that one of them will be permitted to take property from the other without proper legal procedure.

References:

A J van der Walt & G J Pienaar: Introduction to property law, 5^th edition, pp 218-223.

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VAT increase and the effect on property transfers and the registration of transfers before and after 1 April 2018.

Tue, 20 Mar 2018 09:15:34 +0000

The increase was announced in the Minister of Finance’s Budget Speech on 21 February 2018. The standard rate of VAT will change from 14% to 15% on 1 April 2018 (the effective date).

How will this VAT increase affect property transactions, property registrations and estate agent commissions?

Question 1: How will the rate increase work generally for fixed property transactions?

The rate of VAT for fixed property transactions will be the rate that applies on the date of registration of transfer of the property in a Deeds Registry, or the date that any payment of the purchase price is made to the seller – whichever event occurs first. (See, however, the exception in Question 2 below where registration (delivery) of the fixed property occurs on or before 23 April 2018.)

If a “deposit” is paid and held in trust by the transferring attorney, this payment will not trigger the time of supply as it is not regarded as payment of the purchase price at that point in time. Normally the sale price of a property is paid to the seller in full by the purchaser’s bank (for example, if a bond is granted) or by the purchaser’s transferring attorney.

However, if the seller allows the purchaser to pay the purchase price off over a period of time, the output tax and input tax of the parties is calculated by multiplying the tax fraction at the original time of supply by the amount of each subsequent payment, as and when those payments are made. In other words, if the time of supply was triggered before 1 April 2018, your agreed payments to the seller over time will not increase because of the increase in the VAT rate on 1 April 2018.

Example:

A vendor sells a commercial building and issues a tax invoice to the purchaser on 10 January 2018. If the property will only be registered in the Deeds Registry on or after 1 April 2018 and payment will be made by the purchaser’s bank or transferring attorneys on the same date, then the time of supply will only be triggered at that later date. In this case, VAT must be charged at 15% as the rate increased on 1 April 2018 which would be before the time of supply. It does not matter that an invoice or a tax invoice was issued before the time of supply and before the VAT rate increased. The tax invoice in this case would also have to be corrected as it would have indicated VAT charged at the incorrect rate of 14%.

See also the next questions below for the rate specific rule that provides an exception for the purchase of “residential property” or land on which a dwelling is included as part of the deal.

Question 2: Is there a rate specific rule which is applicable to me if I signed the contract to buy residential property (for example, a dwelling) before the rate of VAT increased, but payment of the purchase price and registration will only take place on or after 1 April 2018?

Yes. You will pay VAT based on the rate that applied before the increase on 1 April 2018 (that is 14% VAT and not 15% VAT). This rate specific rule overrides the rules as discussed in Question 1, which applies for non- residential fixed property.

This rate specific rule applies only if:

you entered into a written agreement to buy the dwelling (that is “residential property”) before 1 April 2018;
both the payment of the purchase price and the registration of the property in your name will only occur on or after 1 April 2018; and
the VAT-inclusive purchase price was determined and stated as such in the agreement.

For purposes of this rule, “residential property” includes:

an existing dwelling, together with the land on which it is erected, or any other real rights associated with that property;
so-called plot-and-plan deals where the land is bought together with a building package for a dwelling to be erected on the land; or
the construction of a new dwelling by any vendor carrying on a construction business;
a share in a share block company which confers a right to or an interest in the use of a dwelling.

Question 3: How will the VAT increase affect the seller of the property and estate agent commission?

Two possible scenarios can apply:

Scenario 1:

Should the contract of sale read that a percentage commission plus VAT is payable, that will be calculated at 14% if transfer takes place before 1 April 2018 and at 15% when registration takes place on or after 1 April 2018.

The net result is that the seller (who sold prior to 31 March 2018) will receive a lower net amount on the selling price because of the increased VAT, should transfer take place after 31 March 2018.

Scenario 2:

Should the contract of sale refer to a fixed commission amount inclusive of VAT, the opposite will apply. The seller will receive the same amount, but the agent will receive less because of the increased VAT.

For more information on the VAT Increase, download the SARS VAT Increase general guide and FAQs here:

Please contact us should you have any specific questions

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CAN MY PROPERTY BE USED FOR AIRBNB?

Thu, 08 Feb 2018 12:32:57 +0000

When deciding whether to become an Airbnb host, it’s important for you to understand how the laws work in your city.

According to Brett Herron, the mayoral committee member for transport and urban development at the City of Cape Town, different holiday accommodation land use types, such as B&Bs and guest houses, are regulated by the City’s zoning scheme, called the Development Management Scheme.

If referring to Cape Town, for instance, the city has a Guest Accommodation Policy that sets out the guidelines that have to be considered when applications are made to obtain the necessary planning permissions. According to the Policy, if you wanted to provide a self-catering, flexible accommodation option in line with current trends for transient guests, visitors and tourists, then these are the guidelines that should be followed:

Purpose

A building or group of buildings consisting of separate accommodation units rented for residential purposes, each incorporating a kitchenette / full kitchen, but may also include an option of meals being provided communally to guests.
May include communal areas for the exclusive use by lodgers / transient guests.

Scale

Form and scale of development determined by development parameters of particular zone (i.e. floor space, building lines, height) and the site context.
No general restriction on number of units, but must be locally appropriate in context of the building/site characteristics and surrounding area.
Council may determine / restrict the number of units per development in cases and lay down conditions necessary to mitigate the impact thereof.

Location

Not supported on a single residential zoned property, subject site must have suitable general residential, mixed use or commercial zoning.
Locational criteria that should be considered, include:
- proximity to public transport routes, commercial centres and tourist activities.
- character of the surrounding area;
- mixed use or commercial locations (including areas designated for high density development) are encouraged.

Conclusion

In many cities, you must register, get a permit, or obtain a licence before you can list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local municipalities may also vary greatly in how they enforce these laws. However, it is not impossible to list your property on Airbnb, you just have to find out from the local municipality if you have the correct permissions and if the property has the correct zoning.

References:

Guest Accommodation Policy, the City of Cape Town, Department of Planning & Building Development Management.

“Regulating Airbnb in Cape Town”, Jan Vermeulen, MyBroadband. https://mybroadband.co.za/news/government/210884-regulating-airbnb-in-cape-town.html

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CONTROLLING FUTURE DEVELOPMENTS OF PROPERTY

Tue, 30 Jan 2018 08:11:09 +0000

The provincial heritage resources authority (PHRA) granted a permit in terms of Section 34 of the National Heritage Resources Act 25 of 1999 for the demolition of a structure that was older than 60 years and situated on a property with no formal heritage status. By doing so, conditions were imposed controlling future development on the property and it was held that such conditions were lawfully imposed.

Gees v the Provincial Minister of Cultural Affairs and Sport

The Supreme Court of Appeal (SCA) recently dismissed an appeal against a judgment of the Western Cape High Court. In so doing the SCA held that the large concentration of art deco buildings spanning Davenport Road, Vredehoek, Cape Town, forms part of the national estate and is worthy of protection as a heritage resource.

Therefore, the SCA held that Heritage Western Cape, in granting a permit for the demolition of the appellant’s 60-year-old block of flats, was justified in imposing conditions controlling future development on the property.

It is true that the conditions imposed in the demolition permit amount to a curtailment of the appellant’s entitlement to deal with his property as he sees fit, and may therefore to a certain extent be regarded as a deprivation of property. However, it is widely recognised that in our present constitutional democracy an increased emphasis has been placed upon the characteristic of ownership which requires that entitlements must be exercised in accordance with the social function of law in the interest of the community.

Conclusion

AJ van der Walt and GJ Pienaar in “Introduction to the Law of Property” 7ed (2016), put it as follows:

‘. . . the inherent responsibility of the owner towards the community in the exercise of his entitlements is emphasised. The balance between the protection of ownership and the exercise of entitlements of the owner regarding third parties, on the one hand, and the obligations of the owner to the community, on the other hand, must be maintained throughout. This might, in certain circumstances, even mean that an owner’s entitlements could be limited or infringed upon in the interest of the community. In such cases the infringement must always be reasonable and equitable [not arbitrary].’

References:

Gees v The Provincial Minister of Cultural Affairs and Sport (974/2015) [2015] ZASCA 136 (29 September 2016)

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