Cape Coastal Homes Logo
You are here: Cape Coastal Homes / Latest News / Selling A Property Without Approved Or Updated As Built Building Plans

Selling A Property Without Approved or Updated "As Built" Building Plans


Selling A Property Without Approved or Updated "As Built" Building Plans

The simple answer is no - it is not a legal requirement that the Seller provide a copy of the house plans. However, the National Building Regulations and Building Standards Act mandates that no person may erect, alter add to, or convert any building before the local authorities approve the building plans for the construction or alteration. Consequently, if approved plans are absent, the property owner would be committing a statutory offence.

When a property is sold, the Sale Agreement most often includes a "voetstoots" clause, which means the buyer accepts the property as is with latent (not visible) or patent (visible) defects. However, if the seller knowingly hides a latent defect and the buyer can prove this deception, the seller will remain liable for the defect and may be responsible for repair costs, or the sale could be nullified.

At best, the absence of approved plans may cause the municipality to refuse plans for any future renovations by the Purchaser. At worst, the municipality could make a finding that the illegally erected structure must be demolished.

Case Law:

In the 2014 Haviside vs. Hendriks case, the Supreme Court of Appeal ruled that lacking statutory approval is considered a latent defect. Here's a brief overview of the case details:

Mrs. Haviside bought a property for her mother to live in. Being a first-time homeowner, she did not ask for building plans during the purchase. Years later, her mother arranged the property's sale without Mrs. Haviside's involvement. When the new purchaser wanted to build on top of the garage, they discovered construction issues with the garage: its foundations were weak, and the roof wasn't adequately slanted, making it an illegal structure and non-compliant with municipal bylaws. Mrs. Haviside claimed ignorance of the missing building plans and any defects during the sale. She relied on the voetstoots clause in the deed of sale, which protects sellers from liability for undisclosed defects they were unaware of.

The court ruled that the voetstoots clause protected Mrs Haviside since she wasn't aware of the missing building plans or the garage's defects when she sold the property.

However, Judge AJ Stretch in the Haviside case concurred with the ruling in Odendaal vs. Ferraris, stating that statutory non-compliance, like lacking approved building plans, is indeed a latent defect since homeowners are legally required to have them.

From the cited cases, one can deduce that if sellers were legally obligated to include approved building plans in the offer to purchase, the judges would have explicitly said so. However, their decisions were based on the specific merits of each case.

Conclusion / Best Practice:

In other words, when both the purchaser and seller sign an offer to purchase, it becomes a binding contract. If this contract states that the seller guarantees the possession of approved building plans, they must provide them to the purchaser upon registration. Alternatively, the purchaser can ask for a clause with a suspensive condition, ensuring the delivery of these plans before the contract is fully activated.

The approved building plans can also be included in the property disclosure form, where the seller must indicate whether they have the plans in their possession.

Therefore, if a seller knows there are no approved building plans, it's best to disclose this to the purchaser. Failing to do so might nullify any clause that protects the seller from liability.

Best practice for a prospective purchaser is to insist on seeing a copy of the approved plans before signing any sale documents and then, with the help of an architect or building inspector, to check them against the existing dwelling. If the plans do not correspond with the property, then the buyer need to decide on

(1) either purchasing the property as is, or

(2) make it a condition of the sale that new building plans be drafted and approved according to the dwelling "as built", at the cost of the seller.

What happens if both parties agree that NO building plans needs to be available - BUT the bank requires it:

Numerous court cases have dealt with the problems associated with the lack of building plans, especially when sale transactions sours (litigation) or banks withdraw home loans. 

The mutual agreement to contract despite a lack of building plans becomes legally and practically complex if the suspensive condition (on the bank providing a home loan) is fulfilled by the grant of a bank loan - BUT subject to the condition that updated building plans are to be submitted to the bank.

When the purchaser realises that the bond condition cannot readily be fulfilled, he could decline the bank's offer, or resile from the loan if already accepted, and try to obtain alternative finance, possibly at a less favourable interest rate. The bond attorney could then charge wasted costs. The process could add a few weeks to the overall transfer process and there is of course no guarantee that another bank will not similarly call for building plans.

The parties could cancel the sale by agreement. This could, for example, occur where the purchaser considers that the interest rate is in any event too high, or that other bond conditions are unfavourable, and the seller is not willing to accept the delays caused by compliance with the relevant local authority regulations governing the registration of updated building plans. Here, the estate agent will have a valid claim for commission, levelled at either seller, purchaser, or both jointly depending on the agreements involved.

In such a case, the time that is likely to be required to fulfil the bank's requirement could become a serious factor for either or both parties. One such example would be where the purchaser's creditworthiness changes for the worse in the interim, to such an extent that, on re-assessment, he no longer qualifies for the loan.

According to MacRoberts Attorneys, prevention is better than cure and the offer to purchase should be crafted clearly. Firstly, one should take care to specify what exactly is required for fulfilment of the suspensive condition: Will it be approval in principle of a loan, or actual acceptance of a loan offer by the borrower?

In such a case, the seller need to include special clauses stating (1) that the building plans are not updated and that the seller will not obtain building plans for the property and (2) should the purchaser accept a quotation from a bank which imposes a condition on the purchaser to provide approved building plans, the purchaser will consult with the seller before accepting the quotation and that the seller must consent to the purchaser obtaining the updated building plans for the property at their own costs.

The clause should also mention that there will be no obligation on the seller to agree / consent to such acceptance by the purchaser. If the sales agreement would lapse due to the seller electing not to consent to the purchaser's acceptance of such quotation, the clause need to mention that the parties will have no further claim against each other, and the agent will likewise also do not have any claim for commission or compensation against either party.

Author Meerushini Govender (Miller Bosman Le Roux Attorneys) / MacRobert Attorneys
Published 04 Oct 2023 / Views -
Disclaimer:  While every effort will be made to ensure that the information contained within the Cape Coastal Homes website is accurate and up to date, Cape Coastal Homes makes no warranty, representation or undertaking whether expressed or implied, nor do we assume any legal liability, whether direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information. Prospective purchasers and tenants should make their own enquiries to verify the information contained herein.