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Any Idea of Buying Land?
By arlene | November 19, 2008
Buying a plot is in most respects similar to buying a house; the same basic considerations come into play since the plot is after all just the first stage in starting a new home, although building societies grant bonds less readily on land than they do on houses, so, if money is tight, your chances for a loan are not good. A few additional risks must also be taken into consideration.
Paramount among these is the possibility that the plot may not be in a proclaimed township, or that secluded little piece of land intended to provide the beginnings of a quiet, private home may not be able to be built on because it has no road access.
Land Transfer
Do not buy a plot in an unproclaimed township unless you believe it to be a good speculative deal that will pay off some time in the future. Legislation has been tightened up considerably to avoid crashes along the line of the Glen Anil Collapse. This cost hundreds of would-be land owners their plots on which they had been paying regular instalments for years. In short, land cannot be transferred to you until it is a registered erf or stand in a proclaimed township, which means it cannot be built on in most cases, and it may never be proclaimed unless the developer has the money to construct the necessary roads and services. Admittedly, it may be a proposition to purchase a plot from a developer who undertakes a simple subdivision and needs some capital for roads and water. An element of risk remains, however, and in such cases an Offer to Purchase must clearly set out that the offer is dependent upon the land being transferred within a given period of time. As soon as land in a proclaimed township is transferred to you, you will be liable for rates, so it would make sense to begin building operations soon after transfer.
Land Access
Where access is a problem, you can be sure that the building section of the relevant local authority will not be prepared to pass plans unless its inspectors can easily drive right up to the property. The owner and the builder may be prepared to go to all manner of trouble to get a house erected in a difficult spot, but the building inspector will not. And if you can’t get your plans passed, the plot becomes little more than a picnic spot.
This problem is confined to relatively old townships where approval was given for subdivision before developers had to provide all the necessary roads and services. Buyers interested in property affected in this way are often told that since the land is a registered erf in a proclaimed township, the local authority will have to provide roads and services if called upon to do so. Don’t believe it. The local authority may have plans to extend roads anywhere in its area, depending on funds it has available, but it does not have to do so at all, let alone quickly. At least the buyer has the option of putting in his own access and paying the cost of extending services to the plot where the erf or stand is in a proclaimed township and this is often done by purchasers in some of the older coastal townships for example.
Land Ground conditions
Once you are satisfied that there will be no problems associated with the transfer of the erf or stand and access to it, important factors to bear in mind should include the type of soil and slope of the land, since both will affect building costs and gardening potential. A site with large rocks could require blasting and/or steel reinforced foundations, while a steep site usually implies expensive earthworks, higher building costs and limits on land use. On the other hand, these factors can become features as rocks could provide the basis of a fine garden and a steep site implies less chance of an obstructed view.
Soil is important not only from the gardening point of view but also to ensure your house will have adequate foundations. If you are in any doubt about the condition of the soil have it analysed by a soilsoil is undesirable as no building society will grant a building loan. Clay expands with moisture and shrinks as it dries out, causing serious damage to foundations and walls. technologist. Clay
Septic tanks
Larger erven, or those in the more rural areas are less likely to be served by piped sewerage systems, and it will be necessary to construct a septic tank and drainage system at a cost to you of several hundred rands (but counterbalancing this to some extent is the saving on the sewerage connection fee). The size of the tank depends on the number of occupants it will probably be serving and if properly constructed it will usually provide trouble-free waste disposal. Regulations and detailed specifications for septic tanks are available from the building section of your local authority.
Land Zoning
It is just as important to check with the local authority on zoning and future road plans when buying a plot as it is when buying a home. Probably even more so, since the very fact that an area has yet to be developed poses a question mark over how it can be developed. Watch out for industrial sites, commercial sites, dumping grounds, airports, vleis or stagnant water and so on.
Land Subdivision
Pay particular attention to minimum erf or stand size in the area where the plot is located. In South Africa one of the best protections against inflation is a subdivisible plot. Assuming the owner takes the precaution of siting any construction on building lines which will not get in the way of the future subdivision, the process should be quite straight forward. A surveyor places pegs and prepares a diagram showing the net plot or plots created out of the previous erf or stand. This diagram is taken first to the local authority, then the Provincial Administration for approval before going to the Deeds Registry. It is possible, even likely, that the owner will be charged an endowment fee by the authorities to provide for a small proportion of additional costs necessitated by the creation of room for further residents on the subdivided plot.
Subdivision should not be undertaken much before it is intended to sell off the resulting new property since it will incur rates as soon as it is registered on its own diagram. The owner is likely to become liable for water and sewerage availability charges as well.
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Topics: Commercial, Land, Property, Residential, Rural, South Africa |
November 19th, 2008 at 7:01 pm
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