The Sale Of Immovable Property Without Approved Building Plans
The lack of approved building plans could lead to the local authority refusing to allow any further renovations which a purchaser might have had planned. In some instances, although not too often, the local authority could order that the illegally erected structure or additions be demolished. The local authority is also entitled to levy fines on any “illegal” building work that was done without approval.
Most sale agreements contain a voetstoots clause. Essentially, this clause indicates that the purchaser accepts the risk relating to patent and latent defects existing at the time of the sale. The exceptions to this clause are instances where the seller deliberately and fraudulently conceals latent defects from the purchaser that he or she was aware of at the time. In such instances, the seller will remain liable for these defects. The purchaser will, of course, have to provide evidence that the seller knew what was wrong.
Our law considers a property with buildings erected without municipal approval as a property with a latent defect. The voetstoots clause will normally cover latent defects and a seller will not automatically attract liability if he sells a property with unauthorised building works. If the seller knows that there are no plans and he organised and did the renovations himself, and he deliberately does not disclose this fact (with the intention to defraud the purchaser), the seller cannot hide behind the voetstoots clause.
A latent or patent defect that is of a significant nature, and affects the use and enjoyment of the property, does allow the purchaser certain remedies, including cancellation of the agreement, which he is entitled to do, if he can prove that the defect is so serious that he would not have bought the property had he been aware of this. Other courses of action include a reduction in the purchase price or a claim for damages, depending on the seriousness of the defect and the specific circumstances involved.
In many cases, an offer to purchase a house will be dependent on the purchaser obtaining home loan finance from a bank or other institution. And in most instances, (although not all), the financial institution will want to see up-to-date approved plans before finance will be granted. If the plans lodged with council do not match the house as it stands, then the sale could fall through and set the seller’s plans back for quite a length of time, together with additional costs to rectify the problem.
It is therefore of the utmost importance that sellers ensure that they have municipal approved building plans before selling or marketing their property.