20/10/2017
NEWSFLASH!
ATTENTION ALL AGENTS AND PROPERTY OWNERS
SECOND DWELLING RESTRICTIONS LIFTED
Do you know that as from 1 July 2016, all owners of erven that fall within the City of Cape Town municipality, and which are zoned as Single Residential 1 (SR1), now have the automatic right to erect a second dwelling on their erven?
Prior to 1 July 2016, you would either have had to apply to the City for a Consent Use or have your property rezoned to a zoning category which permits of a second dwelling. None of the aforesaid applications would necessarily have succeeded and both would be time-consuming and expensive.
Having said that the second dwelling right is now automatic there are a few cautionary notes that should be considered namely:
1. Your title deed might contain a condition which prohibits a second dwelling. This condition trumps your new rights and if you wish to exercise your new rights you will have to apply to the person/party in whose favour this condition was imposed, for permission to remove the condition from your title deed. That could mean time; money (a lot usually) and risk. Applying for the removal of a title deed condition is not the simplest process and you will be very well advised to seek the assistance of a Town Planner to do it for you if you have the appetite for the application! Determining whether a title deed condition is restrictive of second dwellings is furthermore not always straight forward.
2. Secondly you must be aware of the fact that when you have built the second dwelling you cannot sell it and retain ownership of your existing dwelling. Both buildings will be on one undivided Erf and if there is to be a sale, the entire Erf (with both buildings on it) must be sold and transferred. Remember that you get a title deed for the Erf – not for each improvement on the Erf. There are two ways to overcome this particular problem namely;
2.1. To subdivide your Erf and thereby create two separate Erven each with its own number and title deed. One of the Erven will contain your original dwelling and the other will contain the new dwelling. If this is achieved you will be free to sell and transfer ownership of any of the two Erven (with the dwelling situate thereon) to any purchaser. The problem with this is that there is no automatic right to subdivide your Erf. You will have to apply to the City for permission to do so and this process is also lengthy and expensive. You will for example have to install services (water supply; sewers electrical supply). If the title deed to your property prohibits subdivision, then and as mentioned in item 1 above, you will be obliged to also apply for the removal of that condition thereby adding further time and expense to the process. If the City of Cape Town is not in favour of subdivisions in your area the subdivision of your property will in fact prove impossible.
2.2. Option two is to convert your ownership from conventional Erf to sectional title. No permission from the City is required for this and title deed conditions prohibiting such a conversion are seldom if ever found. This conversion accordingly bypasses all the problems a sub division presents as described in item 2.1 above. The process is furthermore quick and not particularly expensive. The conversion to sectional title can occur either when you have completed the construction of the second dwelling or before any construction has occurred. If you select the latter option it is possible, in terms of sectional title legislation, to convert your ownership to sectional title based on the original dwelling only and to then create and retain a registered right to construct a second dwelling at a later time. This is called a “right of extension”, and is in fact capable of being sold and transferred. So, you could accordingly, effectively “sell the land” on which the new dwelling is to be built and pass the burden of constructing the dwelling to your purchaser. In this regard the process of reserving the right to build the second dwelling involves filing at the deeds office fairly detailed drawings of the proposed dwelling. Your purchaser will accordingly have to build a dwelling in accordance with those plans and there is therefore no likelihood of you ending up next to a building that does not please you. You should of course in the process of converting to sectional title create exclusive use areas to secure your rights to exclusively use for example, portions of the garden or a swimming pool etc. You would of course similarly cater for exclusive use areas for your potential purchaser.
3. Having said all the above, the position of your existing dwelling might not leave enough room (bearing in mind building lines and the like) to construct the second dwelling. That does not however mean that you are without options. There is one option which remains namely to add a second story (or reserve the right to do so) to your existing dwelling and to then convert to sectional title as summarised in item 2.2 above. The ground floor would be one section and the next floor would be another. Whether this will be viable from an economic point of view will obviously have to be determined.
4. Should you want to explore your options , given this change to the law, please contact us so that we can help you through the process and explain matters to you in greater detail. Send your emails to [email protected] and you will be contacted to arrange an appointment.
ROBERT KRAUTKRAMER
19 October 2017
