Subdivisions
Key Takeaways:
Subdivisions involve dividing land into smaller plots for development or sale.
Zoning laws, infrastructure, and environmental considerations play pivotal roles.
Diligent research and compliance with local regulations are essential for successful subdivision projects.
Conveyancing relates to the legal process that transfers ownership of the home from the seller to the buyer. The conveyancer (who is an attorney) is usually appointed by the seller, but paid for by the buyer (the fact that the fees are normally covered by the buyer is simply a rule of thumb.
It’s not something that is necessarily set in stone and a different arrangement can be negotiated in your agreement of sale).
What is Conveyancing?
Conveyancing is not only a complicated process, but a time consuming one as well. Particularly in transactions related to the subdivision or consolidation of properties, the registration of servitudes or transfers of both divorce or deceased estates.
Benaters are specialists in the field of property and conveyancing and are perfectly poised to assist their clients with all matters of property transfers. Get in touch with them today to see how they can assist you.
What does the transfer of property entail?
Once a seller has accepted an offer to purchase (meaning the transfer process has officially begun), the buyer must produce proof that their bond application has been successful.
Following that, the seller must then appoint a transfer attorney, (who is a conveyancing attorney) to handle the transfer process. Transferring attorneys are one of three attorneys who will play an important role in the home buying process. This team of attorneys includes
the transfer attorney, or the conveyancer who is responsible for registering the property in the new owner’s name,
the bond attorney (appointed by the bank) who is responsible for registering the bond in the home buyer’s name, and
the cancellation attorney (appointed by the bank) who is responsible for attending to the existing bond cancellation.
Once the transfer duty has been paid, all documents have been lodged at the Deeds Office and the transfer attorney has finalised their accounts and paid over all proceeds to the seller, commission to the agent and refunded any credit that is due to the seller (within 12 months), registration of the property (meaning the purchaser is now the new rightful owner of the home) should then occur.
What does a Conveyancer do?
Firstly, it must be noted that no property sale or transfer can be concluded without having a qualified conveyancer on board.
A conveyancer is a lawyer that has passed an additional conveyancing qualification exam and is a specialist in the field of property law and conveyancing. They perform a vital function where completing a property transaction is concerned.
Conveyancers attend to the process of transferring legal ownership of fixed property from one person (or a company or trust) to another. In a nutshell, this process amongst other things, involves ensuring the deed of sale meets all the legal requirements, including requesting and collecting supporting information (such the mortgage bond, cancellation figures, title deeds from the seller’s bank, compliance certificates from the seller, and the amounts from the municipality for a rates clearance certificate).
The conveyancer is also tasked with drafting all the necessary documentation (such as a “power of attorney to pass transfer” for the seller to sign, a declaration in respect of marital status, ID Number as well as the bond registration documentation for the purchaser when registering the bond) that needs to be lodged with the deeds office to finalise the registration of the sale.
What does the process of subdividing a property entail?
Subdividing is the process by which one property is divided into two or more portions. So sub-divided. When someone buys a portion of a subdivided property, it is exactly the same as buying any other vacant land (or erf). In other words, the purchaser acquires the full rights and title of an owner over the subdivided portion which they have bought. In other words, it will work the same way as any other property transfer (see above).
But why?
There are significant financial advantages to be gained by subdividing property - cash injections to ease financial burden whilst also creating additional sources of income and considerably reducing maintenance costs (including reducing rates and taxes). In addition, one can potentially achieve a higher return on investment when selling and proceeds from the subdivision of land can also be used to finance a new house on the same property (or erf).
A property can also be subdivided into two or more portions, each of which may be sold separately to interested buyers. In many cases, subdivided properties are sold to developers for town planning purposes. And that can be a very profitable sale. With an ever-growing demand for properties in sought after areas (where there is often very limited space), subdividing a property can offer a significant financial benefit to the owner by selling off various portions.
BUT, the type of land is important
Subdivision (and zoning) of land are stringently regulated by a multitude of laws, regulations and bylaws.
For example (and depending on the type of land to be divided), certain legislation may have an impact on the process. The Subdivision of Agricultural Land Act, 70 of 1970 for example regulates the subdivision of farmland and requires the consent of the Minister of Agriculture before the requested subdivision can take place.
Even if the land you are subdividing is not agricultural land, the location of the land is still an important consideration as Provinces and Local Authorities have their own legislation and bylaws that govern subdivisions and regulate the details of such a transaction. These include the minimum size of a subdivided portion, the number of portions on one piece of property, availability of services, access to roads and property zoning (to name but a few).
Note: most plots across South Africa cannot be subdivided to less than 4 000sqm, although some properties have succeeded in being subdivided to 3 350sqm. So, it depends on the area within which the property is located.
The relevant Local Authority should be contacted for confirmation on these, as ascertaining the specific legislation and bylaws that apply as well as the minimum subdivision portions in a particular situation is crucial before beginning the process.
How is a subdivision done?
The process will begin by first appointing a Conveyancer to attend to a deed search to establish that there are no title deed conditions prohibiting subdivision;
Once the Conveyancers certificate is obtained, a land surveyor must be appointed to survey the land to draft subdivisional diagrams and to submit an application to the Municipality;
The Municipality will, (after a process of inspection and referral to various departments and if they approve the subdivision), issue conditions of approval;
The land surveyor will then submit the diagram to the Surveyor General’s office for approval and registration;
The Municipalities conditions need to be complied with prior to them issuing a Section 137 clearance (which is required in order to register the subdivision).
A town planner will usually, on behalf of the owner, assess all the requirements as set out by the relevant Local Authority. The town planner will then determine and provide recommendations regarding any restrictions or limitations on the subdivision and attend to advertisements and notification of all relevant parties (e.g. affected neighbours) to allow for legitimate objections to be lodged. Any objections by interested parties, will have to be dealt with in the appropriate tribunals/hearings and this may delay the process and increase costs significantly. In addition, a town planner together with an architect will draw up plans and a detailed report which will be submitted to the city council;
Approval from your neighbours will be required and registered letters need to be sent, informing them of the planned rezoning. Adverts also need to be placed in the press allowing for objections;
The services of an engineering firm (depending on the complexity of the subdivision) may also be required to perform a full site inspection and provide a services report;
Once all these condition, consents and advertisements have been complied with, each of the relevant municipal departments will sign a clearance form which will enable the section 137 certificate to be issued, and
With all legislation and bylaws complied with, a conveyancer will then be instructed to draft the necessary documentation for registration of the subdivision in the Deeds Office.
For more detailed information on the process of consolidation, please refer to our article Sub-Dividing Property - A Guide.
Why should you hire a Conveyancer to handle your subdivision?
There are many legal aspects that need to be taken into consideration depending on the classification of the property. Property can be defined as commercial, agricultural and residential, (to name a few), and each of these types of land have their own unique set of laws which regulates subdivision. There are also legislative variations based on the geological position of the land within South Africa.
Therefore, before making any decisions on whether or not to subdivide your property, it is crucial that you thoroughly research options in consultation with an experienced land surveyor, professional town planner and of course, a Conveyancer.
It is therefore crucial to involve a qualified Conveyancer in the whole process (from the very beginning) in order to establish which procedures to follow. They will be able to guide and advise you properly and ensure that the whole process proceeds smoothly and without unnecessary hitches.
Why should you trust Benaters with your subdivision?
We have successfully completed many subdivisions of land across South Africa and aim to focus on the final processes of subdividing your property, taking the process forward from the town planning to the final registrations in the Deeds office. But it is a complicated process and the appropriate steps need to be followed and relevant legislation complied with in order to affect a property subdivision. Depending on the type of land to be divided, certain legislation may have an impact on the process.
Regardless of the complex process, we are still able to draft the necessary documentation for registration of the subdivision in the Deeds Office – a process we have been through many, many times.
We are proud to be able to offer Conveyancing, a specialised niche service to you, our clients. We take our duties as Conveyancers very seriously (always keeping in mind the impact a property transfer can have on an individual or family) and therefore hold our work to very high standards. You can trust us with your property, because we treat the entire process as if we were going through it ourselves.
We are here to help you. In any way we can!
So please, get in touch and let us handle your property transfer in the best way we know how – professionally and with the utmost due care.