What are the financial implications if a building is not approved by the local council?
Too often homes are sold without the buyer having cross referenced the structure against the existing building plans to ensure that it has been approved by the local council. In fact, sometimes people purchase a property without having laid eyes on any building plans at all. This can have catastrophic repercussions down the line, both from a financial and timeline perspective.
It’s usually only when the new home owner begins the process of renovating, that he or she becomes aware of the fact that they have purchased an unapproved structure.
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Unfortunately, it is too late to claim against the seller at this stage, as most properties in South Africa are sold ‘voetstoots’, meaning the new home owner will bear the financial brunt of this loss.
In the worst-case scenario – when the structure does not comply with the building guidelines at all – the city will demolish any part of the building that is not indicated on the approved as-built plans.
In cases where the structure does comply with the building guidelines, but plans were not submitted for approval, the new home owner will need to get the existing structure approved, before submitting plans for new renovations.
This too can be a very expensive and time-consuming process. First, an application to amend the existing building plans is submitted to council. Council has approximately two months to respond to your application. If you are fortunate enough that council does not issue an instruction to demolish, you will likely need to apply for departures, get necessary approvals from neighbors and submit the amended plans for evaluation, to name but a few of the hurdles that must be overcome.
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The timeline for this process is typically 6 months, but it can easily exceed a year depending on the specific situation. On top of this, a penalty fee of a 100% of the building cost is charged for any unapproved structures and scrutiny fees that are calculated according to the square meterage of the building, will also apply.
Keep in mind that this is just to approve the existing illegal structure and at this stage no new plans for renovations have been submitted.
Home owners often feel pressurised to make hasty decisions in fear that they will lose out on the property, especially in Cape Town where the market is peaking. It is important to remember that a home is one of life’s biggest investments, so don’t be too hasty to commit to anything without having completed the necessary checks beforehand.
A thorough inspection of an average sized home, including the issuing of a full report, can be completed within 48hours.