We 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.
Why subdivide your property?
- Get 2 properties for the price of one;
- Transfer a separate property to each of your children to provide security and keep the family close to you;
- Build houses on each subdivision and rent them out to subsidize retirement living expenses;
- Sell subdivisions to boost retirement funding and savings;
- Retain a more manageable garden size;
- Acquire a new property free of transfer duty.
Considering subdividing your property?
- We suggest you arrange to meet with one of our conveyancers to discuss your ideas with regard to the subdivision.
- We will guide you as to the best way forward and refer you to a Town Planner in your area.
- We have excellent working relationships with a number of Town Planners in Gauteng.
The Town Planner will advise you on:
- The municipality’s density requirements in your area – the municipality will not allow a property to be less than a certain size – depending on the area;
- Whether or not the property will need to be rezoned to accommodate the subdivision – sometimes the zoning is such that only one residence can be built on the property and in approving the subdivision the municipality will insist on the rezoning
- If a rezoning is required, the municipality will raise an endowment charge to compensate for the additional load on the municipal grid (depending on the suburb this can be anything from R40 000 to R100 000 or more);
- Whether or not one or more of the conditions of title will need to be removed to accommodate the subdivision – often there are conditions of title that prohibit a subdivision.
- If the Town Planner is of the opinion that a subdivision is feasible and you wish to proceed, the Town Planner will prepare an application which would include a diagram of your property depicting the proposed subdivision, and submit it to the municipality for consideration.
- The Legal Administration department of the municipality will copy the application to its various departments (ie engineer, roads, electricity, water, parks, etc) for their comments / requirements; an example of a condition imposed by the roads department might be a requirement that the entrances to the properties be relocated so as not to interfere with traffic flow on the public road; or a condition imposed by the engineers department that the 100 year flood line be taken into consideration when framing the new Subdivision diagrams.
- Once the various departments have returned their feedback the Legal Administration issues a preliminary approval which includes various conditions which would need to be met before the final approvals are granted.
- You will then instruct a surveyor to frame the various diagrams which the surveyor will cause to be registered at the office of the Surveyor General.
- We would suggest you consult with us again at this stage to ensure we have a good understanding of your intentions and specifically the conveyancing requirements.
You have 2 choices:
- The first is to request the deeds office to issue a Certificate of Registered Title in respect of each new portion of land – this will enable you to sell an individual portion in your own time and the conveyancing process would be relatively quick;
- The second is to transfer one or more portions of land off the existing title deed with reference to the registered subdivision diagrams, immediately, but the conveyancing process might be a little slower than a normal transfer because there are additional requirements. (In both instances we will include any new servitudes and conditions of title)
- In addition to attending to the registration of the new Certificates and / or Transfer we might need to: Register a new Notarial deed of Servitude in favour of the municipality or any other person – the municipality will often require a 2 meter servitude for municipal services along “any 2 boundaries”
Apply for the removal of conditions from the existing deed
- Apply for the noting of a caveat against the property in respect of any new condition that may apply but might not yet be registrable (one cannot register a servitude in favour of oneself so the caveat will provide that when the property is transferred the new servitude will have to be registered.
- The signed documents are forwarded to the Legal Administration department of the Municipality for endorsement in terms of Regulation 38, together with copies of the registered subdivision diagrams. Legal Administration will then enquire from the same departments that provided the initial feedback whether all the initial requirements have been completed.
- If all the conditions have been completed, and Legal Administration is satisfied that the conveyancing documents include all new conditions they requested, they will issue a Regulation 38 certificate which is an indication to the deeds office that the municipality is satisfied that the new portions can be registered.
- We should then be in a position to lodge our documents in the Deeds office for registration.
- If we are attending to the registration of a transfer, we will need to obtain a rates clearance certificate for the whole property from the municipality. There are often delays here but we use experienced municipal coordinators to assist us in expediting the process.
- If there are mortgage bonds registered over your property, we would liaise with the bank with regard to obtaining consents to the various acts of registration in the Deeds office.
Can one sell a subdivision even before it is registered in the office of the surveyor general?
- The initial application to the Local Authority will necessarily include a layout plan showing where the intended subdivision will occur and all the buildings on the property –
- One can use this layout plan to accurately describe the new subdivision to be sold in the Agreement of Sale.
- The Agreement of Sale must include a suspensive condition that the Municipality issues a Regulation 38 Certificate within a certain time – to protect the Seller and the Purchaser – we should advise you what time this would be, depending on the progress at the municipality.
- One must bear in mind that these transfers will take a lot longer –perhaps 6 to 12 months.
- The benefit for the Purchaser is being able to build their dream home in an established neighborhood close to their offices and children’s schools is often too compelling
- One can expect the whole process to take anything from 1 to 2 years from the first consultation with the Town Planner to the final registrations in the deeds office.
- If the municipality requires a rezoning, for example, the process will take closer to 2 years
- If there is neither rezoning nor any conditions of title to be removed, the process might take closer to one year.
Andrew Smith has 26 years of conveyancing experience, including subdivisions, township developments, sectional title developments, servitudes, usufruct transfers, general transfers, mortgage bonds, and uses his tax background to structure complicated transactions in the most tax efficient manner.