SUBDIVIDING YOUR PROPERTY – WHAT YOU NEED TO KNOW
WHAT DOES IT MEAN TO SUBDIVIDE YOUR PROPERTY?
Subdivision entails a property owner dividing his existing freehold property into two or more smaller pieces of land. The new pieces of land are called subdivided portions. The property owner can then sell one or more of the subdivided portions to a Purchaser, or retain and develop the separate portions.
Subdivisions have become popular in the municipal jurisdiction of the City of Cape Town as the City has adopted a policy encouraging densification. There is a trend now to subdivide larger properties into smaller, more manageable portions. It is not only property developers that subdivide property – ordinary residential owners of property are often motivated to subdivide their properties to either sell for financial benefit, or to contain costs by
living on a smaller property with lower rates and potentially added security.
THE ROLE OF THE TOWN PLANNER IN THE SUBDIVISION PROCESS
When you decide to subdivide your property, the first professional you need to consult is a town planner. The town planner will advise you on the process and help you apply to your local authority or municipality to get the permission needed to subdivide.
The municipality will consider various factors in deciding whether to grant permission to subdivide. These factors normally include the size of your property and minimum erf sizes permissible, the availability of electricity and other municipal services and the impact of the subdivision on traffic in the area. The role of a town planner is inter alia to motivate your application, taking the above factors into account.
WHAT TO CONSIDER BEFORE LAUNCHING A SUBDIVISION APPLICATION
Whilst subdividing property can be very lucrative, it is important to be aware that it is a long and involved process and to be aware of what lies ahead if you elect to apply for a subdivision. The most important considerations will invariably be the time and costs involved in subdividing your property. The town planner should be asked to help you to estimate a realistic time period to complete the subdivision process and should also be asked to guide you on the estimated costs that will apply. These costs will include not only the town planning fees but also the costs of employing a land surveyor to prepare the diagram/s for the new portions, contributions to council and the costs of having to install sewer lines or new electrical boxes. Each subdivision will have to be looked at on an individual basis to see what potential time and cost factors are applicable to avoid any nasty surprises down the line. The above costs must be looked at in light of the different phases to a subdivision as
set out below.
THE THREE PHASES OF A SUBDIVISION – FROM APPLICATION TO REGISTRATION
The subdivision process can be broken down into three distinct phases.
PHASE ONE
The first phase is to bring the subdivision application and obtain the permission of the municipality to subdivide the property. This application will be brought by the property owner, usually in consultation with a town planner. Once the subdivision is approved by the municipality, many property owners mistakenly consider this to be the end of the process, but in fact this is merely the conclusion of phase one.
PHASE TWO
When the municipality grants permission to subdivide, it includes various conditions that must be complied with before the new portions can be separately registered or transferred in the Deeds Office. These are called the “Conditions of Subdivision” and are set out in Annexure A to the subdivision approval in the City of Cape Town. This is the second
phase of the process.
What property owners often do not realize, is that the town planner’s job does not extend to helping the property owner fulfil these requirements unless this is specifically arranged. To avoid unnecessary delays and expenses the property owner is advised to discuss this phase of the process with the town planner or a Conveyancing Attorney very specifically in order to establish what is required and how to go about complying with the conditions, which usually relate to municipal services and access servitudes.
PHASE THREE
The final phase of the process is the transfer or separate registration of the newly subdivided portions to the new owners in the Deeds Office once the municipality confirms the conclusion of phase two by issuing the so-called “Transfer Clearance Certificate”. This is done by the Conveyancing Attorney. The Conveyancing Attorney will prepare and arrange for signature of the documents or servitudes that may be required to be registered. These could include servitudes of right of way, sewer servitudes and a variety of council servitudes. If the portion or remainder of the property has been sold, the owner and purchaser will sign transfer documents with the conveyancer and the relevant portion will be transferred to the purchaser to give effect to the subdivision.
CONCLUSION
From this overview of the subdivision process you will note that the subdivision process involves various role-players and that a complex series of interactions is unavoidable in bringing the subdivision to the point that separate registration can be effected. In the event that there are conditions imposed by the municipality that are difficult to comply with or that any of the inter-related processes run awry, the subdivision process will inevitably be slowed down. In the City of Cape Town, a subdivision will take anything from 8 months to 2 years from submission of the application to separate registration.
At FHA, our attorneys have significant experience with the subdivision process. We will gladly assist you with advice and guidance in this regard, and look forward to being of assistance to you.
