Subdivision costs must be stipulated

Homeowners with large stands are increasingly selling off parts of their property to reduce their home loans, achieve greater security and lower their maintenance costs and property rates.

And the trend is being fuelled, says Berry Everitt, CEO of the Chas Everitt International property group, by local authorities keen on densification and getting better usage out of existing infrastructure.

“In addition, there is relatively high demand now for empty stands in well-established suburbs, from buyers who want to build modern homes but still live close to town centres.”

However, to derive the most benefit from such a move, sellers must ensure that the sale agreement specifically stipulates who is to pay the costs of subdivision, he says.

“These costs include the fees for a surveyor to draw up the necessary SITE diagrams, as well as those for council approval and for electricity, water and sewerage connections to the new stand – and can amount to several thousand rand.

“And while it is quite likely that the buyer will agree to pay for the subdivision in return for a lower land price, the sale agreement must then make this absolutely clear – otherwise the law will simply assume that the seller, as the original owner of the property, is liable.”

Article by: www.chaseveritt.co.za