Answer to a question from a reader

Can I apply for a SPLUMA certificate now in case I later decide to sell my property?

The short answer

Unless your property constitutes a "new erf" or land development, you won't need a SPLUMA certificate.

The whole question

Dear Athalie

Can I preemptively apply for a Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA) certificate in case I decide to sell it?

The long answer

On 1 July 2015, the new SPLUMA legislation was introduced to develop and regulate planning authorisations and promote consistency with regard to land development under a municipality’s jurisdiction. SPLUMA made the municipalities responsible for making by-laws to ensure that properties were compliant with town planning and land use provisions.

Section 53 of SPLUMA states that “… the registration of any property resulting from a land development application may not be performed unless the municipality certifies that all the requirements and conditions for the approval have been complied with.“ (My emphasis)

A helpful article in May 2020 by Fatima Rodrigues and Kathu Neluheni of Property Law & Real Estate Practice, points out that there has been a great deal of confusion about the requirement for a Section 53 certificate in terms of the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA), to be able to transfer immoveable property.

In reality, the authors say, only some property transfers require a SPLUMA certificate. They set out the conditions for which a SPLUMA certificate is required:

“… where (i) any new erf’s title deed is being applied for or any such erf is being transferred in a new township; or (ii) any new subdivided erf’s certificate of registered title is being applied for or a new erf resulting from a subdivision is being transferred; or (iii) any new certificate of consolidated title is being applied for or a new erf resulting from the consolidation of two or more erven is being transferred.”

They conclude that “Only a ‘New Erf’ requires a SPLUMA Certificate to be obtained from the municipality for purposes of registering a new title deed in respect thereof or for purposes of registering the transfer of a New Erf and the specific requirements to be complied with are set out in each municipality’s by-laws. No such certificate is required in respect of any property which is not a New Erf.”

The findings of the Supreme Court of Appeal (SCA) on 17 June 2022 further clarifies the position:

The appeal was brought by Govan Mbeki Local Municipality and Another v Glencore Operations South Africa (Pty) Ltd and Others. This followed a High Court case brought by Glencore and others where the High Court found that the municipalities had overstepped their municipal planning boundaries by prescribing to the Deeds Registrar under what circumstances a transfer of immoveable property can take place.

The question before the SCA, taking the statutory and constitutional provisions into account, was whether the municipalities had the power to make laws regulating the transfer of properties. 

The court noted that all the municipalities involved in appealing against the High Court’s decision had made by-laws that prevented an owner from applying to the Registrar of Deeds to transfer an erf or land unit without a certificate from the municipality certifying that all spatial planning, land-use management, building regulations or approvals had complied with the municipal by-law. Glencore and others had approached the High Court for an order declaring the relevant sections of the by-laws unconstitutional on the basis that the municipalities did not have the right to enact such by-laws. And that the by-laws created insurmountable obstacles for a property owner to transfer a property, which deprived the owner of the right to sell the property. And that the effect of the by-laws was to impose an embargo on the transfer of property until the municipality issued a certificate saying that all debts of the property had been paid and that the use of the property and buildings was compliant with the municipal by-laws.

The High Court had found the by-laws unconstitutional and invalid in that they constituted an arbitrary deprivation of property (s 25(1) of the Constitution) and further, that the by-laws were not authorised by s 156 read with Part B of Schedule 4 of the Constitution, and were also in conflict with s 118 of the Systems Act.  

The SCA found that the municipalities did not have the power to make laws regulating the transfer of properties and that the embargo on transfers went beyond municipal planning. The municipalities could not prescribe to the registrar of deeds under what circumstances a transfer could take place. A municipal embargo would prevent the registrar from registering the transfer of the property until the certificate had been issued by the municipality. It would prevent a transferring owner from complying with their obligations under the sale agreement. It would prevent a transferee from receiving the ownership that they were entitled to under the sale agreement.

The Court found that the transfer of property is already expressly regulated under the Deeds Registries Act and also s 118 of the Systems Act. The SCA agreed with the High Court that the municipal by-laws sought to amend s 118 by imposing extra liabilities on the seller of property. This was not permissible.

“If the SPLUMA intended to authorise municipalities to introduce an embargo on registration of transfer of properties as an enforcement mechanism, it would have provided for that expressly. Neither s 32(1) of the SPLUMA, which requires municipal by-laws that enforce the municipality’s land-use scheme, nor any of its other provisions, authorise the embargo.” notes that a SPLUMA certificate remains a requirement for transfers in new developments, in accordance with section 53 of the Act.

So, to return to your original question: unless your property constitutes a “new erf” or land development as set out in the beginning of this letter, a SPLUMA certificate would not be required.

Wishing you the best,

Answered on Dec. 1, 2022, 9:48 a.m.

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