Buying a house? Beware of restrictive title conditions

Tony and Jen have just bought a house in a popular residential area. They plan to make this house their home and raise their family in it. Fast forward ten years and Tony and Jen wish to extend their house in order to make room for their third child that is on the way. Imagine their frustration when they find out that they cannot add even one more room to the house due to restrictions on the title deed!

Buying property is an important step in a person’s life and serves as an investment for the future. However, the process of buying a house can be a laborious and daunting, beginning with the search for the ideal and affordable house in the right area, making a considered offer and, on acceptance of the offer, getting the loan application approved and possibly selling your current property. There’s a plethora of factors to consider before buying a house and as a result by the time buyers find the perfect house they just want to seal the deal. Alas, often forgotten is the important check of the title deed for any existing restrictive conditions – a potentially disastrous mistake for buyers having ‘big’ plans for the property and not having beforehand familiarized themselves with the title deed of the property.

Often residential property title deeds contain restrictive conditions, most importantly perhaps, restrictions regarding the size, number and placement of dwellings and other buildings that may be erected thereon. Simply put, these restrictive conditions limit the owners’ use and enjoyment of their own property in the sense that they often indicate a limitation or prohibition on some action by the property owner.

Some common restrictive conditions include the following:

  1. No building or other structure may be erected within the servitude area.
  2. No large-rooted trees may be planted within the servitude are.
  3. The erf is subject to servitude for transformer purposes.
  4. The erf is subject to servitude for municipal purposes.

To avoid wearing Tony and Jen’s shoes, buyers should, before finalizing their offer, request their attorneys to obtain a copy of the title deed and consult with them to discuss any restrictive conditions therein, particularly where these conditions may impact on their future plans.

The consequences of not reading or obeying the title deed conditions carefully can be disastrous as illustrated in the case of Van Rensburg NO and Another v Equus Training and Consulting CC and Another. Equus Training CC (“Equus”) owned residential property in Port Elizabeth and embarked on a venture to build a guest house on its property. Equus went ahead with building works that extended over the building line, a restrictive condition prescribed in the title deed. A neighbour applied to the court for relief and the court subsequently held that Equus was interdicted from continuing with any building work that encroached over the building line of the property and that all building works that encroached should be demolished at the expense of Equus.

The above is not intended to discourage property buying but rather act as a warning to the general buyer to be careful when considering an offer and include in his due diligence also an investigation of the title conditions (if any) of the property. Often the sale agreement also contains a waiver clause that transfers the risk of restrictive title conditions to the buyer and if the buyer’s homework has not been properly done, the buyer may be sorely disappointed when his future plans are affected by restrictive title conditions.

April 25, 2013

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