The law of the land
Before committing finance to a property transaction, it is imperative that you are aware of any restrictions that may be imposed on the intended use of the property. So says Peter Gilmour, Chairman of RE/MAX of Southern Africa.

“Considering that you may not use property for purposes other than those for which it is zoned, this particularly applies to property buyers who are thinking of purchasing a residential property to use as their business premises,” he says.

While some areas may allow owners to use a small percentage of their house for business, they are unlikely to make exceptions in order to avoid residential properties from becoming completely commercial. Gilmour says that only around 20% of your home could be used for business without infringing on any land use regulations.

Gilmour explains that the zoning system, which is used by local governments in most developed countries, is a mechanism of land use planning, where permitted uses of land, based on mapped zones, separate one set of land uses from another. “These zonings are generally categorised into residential, commercial or industrial zones and may be use-based where the uses to which land may be put are regulated, or it may regulate building height, land coverage and similar characteristics or a combination of these.”

Gilmour says that it is however possible to apply for rezoning of residential property for business use or for zoning that will allow for the development of, for example, an exclusive cluster complex. “In this case, rezoning applications giving reasons must be submitted to the local authority, with written confirmation from neighbours that they have no objections,” he says.

In fact, the offer to purchase can stipulate that the property is subject to the local authority's approval of the rezoning, subdivision or the consent to use the property in a certain way. “The details of restrictions are set out in the title deed of the property and can be established by obtaining a copy from the Deeds Office, or from the bank or financial institution that holds the bond,” says Gilmour.

Depending on the type of rezoning or consent use application, obtaining a decision can take anything from six months to a year or more. Gilmour says that the process is arduous - after the application is submitted it is circulated to relevant council departments and agencies for comment. The application is then processed by a planning officer who makes a recommendation as to whether the application should be approved or not.

“If the official's recommendation opposes the application and where interested parties have lodged objections, a Tribunal Hearing is scheduled and the applicant, objectors and council officials are given the opportunity to argue the case,” Gilmour explains. “If any party is dissatisfied with the Tribunal's decision, they may appeal to the Provincial authority, known as the Townships Board.”

He notes that with the rezoning process, aside from the cost of preparing the application including advertising, plans documents, professional fees etc, there is also an application fee payable to the council.

Gilmour advises that since a change of the zoning regulations or amendment of the title conditions requires an application and a formal procedure, and considering that there are numerous different kinds of applications, many of which are technically and legally complex, the best option would be to consult a professional town planning consultant or other professional such as a land surveyor or a lawyer.

Article by: www.remax.co.za