Part 2: Subdividing your property. Not as easy as 1-2-3!

Mr Jones has been enjoying his retirement but his waning retirement fund has been of increasing concern to him. Mr Jones owns a large old property in the city and his nephew’s suggestion to subdivide this property and sell one portion of the erf to his nephew, gets him thinking about the possibilities of generating some much needed funds for his retirement fund, particularly as the rates and taxes and the cost of maintaining his more than 2000m2 property is increasingly taking its toll on the finances. But what does such a subdivision entail and is it really that quick and easy?

In this, Part 2, we look at the registration process Mr Jones has to follow after the approval of the subdivision. In Part 1, we looked at the application requirements for approval with which Mr Jones had to comply with.

Without the help of a professional team, Mr Jones may upon receipt of the approval of his subdivision from the Local Government have been under the impression that registration of the subdivision was close at hand and likely to happen quickly. The harsh reality is that once the letter of approval has been received from the Provincial Government, and accepted by him in writing, a fair number of steps still need to be completed.

Mr Jones’ appointed land-surveyor must now complete a sub-divisional survey and draft a Surveyor General Diagram of the new subdivision. The proposed subdivision diagram will be lodged at the Surveyor General's office for his approval and once registered, certified copies will be issued. This process usually takes approximately 12 weeks and it will often be required that an SLA (Service Level Agreement) be drafted and agreed upon by the applicant, the engineers and the municipality. Consultations to discuss this agreement will thus have to take place.

The conveyancer will correspond with the land-surveyor as well as the town planner for the duration of the process, ultimately obtaining the following documents:

• All the original applications;
• Letters of recommendation;
• Letters of approval;
• Acceptance of conditions;
• Registered subdivision diagram;
• Consent to registration of a subdivision by the bondholders;
• In case of servitudes or other restrictive conditions, consents pertaining thereto;
• The service level agreement; and
• In the case of immediate transfer, various additional documentation from the buyer.

Once the conveyancer has confirmed that all requirements have been complied with and he  is in possession of the above documents, together with the original title deed, application will be made to the local authority to resolve any outstanding rates, levies and/or payments. The local municipality will subsequently issue a certificate allowing the applicant to register the subdivision and the conveyancer will draft the following documents on behalf of Mr Jones in the event that he does not intend to sell the subdivided land:

• Application to issue a Certificate of Registered Title;
• Draft Certificate of Registered Title or Title Deed; and
• Any other necessary consents.

If Mr Jones wishes to sell the subdivided land, the transfer of the subdivided portion of land will take place directly from the Surveyor General Plan. The conveyancer will advise the parties in this regard.

Mr Jones (and any other relevant parties i.e. wife, if married in community of property, or trustees in case of a trust etc.) must sign the relevant documentation in the presence of a conveyancer, where after the application and the Certificate of Registered Title will be lodged at the Deeds Office together with all required supporting documentation. Once the documents have been lodged at the Deeds Office, an estimated time of between two to three weeks should be expected before registration can take place and the Registrar of Deeds issues a Certificate of Registered Title or in the case of immediate transfer, a Deed of Transfer. Delivery of the latter title should occur within six to eight weeks after date of registration.

All in all, a team of experts should be in a position to register an uncomplicated subdivision of land such as that of Mr Jones (excluding transfer of the subdivided portion of land), between 18 to 30 months from start to finish. The costs of the various professionals involved, will depend on the extent of their involvement, and will vary according to the complexity of the subdivision. It is advisable though to obtain quotes or estimates from the various professionals involved before the subdivision process commences.

Disclaimer:

Please note that this article is a generalisation on the course of action taken during uncomplicated subdivision applications and these requirements, timeframes, costs and processes may differ for various Provinces and Local Governments. If considering a subdivision, it is advisable to contact a conveyancer to assist you with specific queries or applications and for a referral to a town planner, land surveyor and engineer that can assist you in managing your proposed project efficiently and cost effectively.

Source  -  Miller Bosman Le Roux