Beware when buying a house
2009-04-09
CAN you stop the municipality from approving your neigh- bour’s building plans if you are able to show that the proposed construction will reduce the value of your house? The answer is “Yes”, but with a very important limitation. Be warned that a recent case before the Supreme Court of Appeal highlights the need, before buying a property, to value it on the basis that your neighbours might in future develop their properties to the full potential allowed in the area. In this case, a house owner complained that a proposed 2½ storey addition to the house next door would be “unsightly, objectionable and out-of-keeping with the architecture of the suburb”, would violate his privacy, would prejudice his access to warmth and sunlight, and would “cause a substantial derogation in the value” of his property. The Court held that, in considering building plans, the local authority must: * Approve the plans only when satisfied that the building will comply with all applicable laws; and * Disallow the plans if the proposed construction will probably (not “possibly” - it must be a probability) reduce the market value of neighbouring properties, disfigure the area, be unsightly or objectionable, or be “dangerous to life or property”. What is important is that you cannot prove that your property’s value will diminish simply by providing “before and after” valuations. ”Market value”, held the Court, “is the price that an informed willing buyer would pay to an informed willing seller for the property, having regard to all its potential at the time of sale, both realised and unrealised.” “Informed” parties would have investigated all factors that could influence the property’s inherent value - zoning, height restrictions, building lines etc - and would have determined a “market value” accordingly at the time of purchase. The Court did accept that in some cases the likelihood of a neighbour developing in a particular manner might be considered by the parties “as too remote to influence their price”, but in the normal run, if you buy a property in an area with say a height restriction of three storeys, you must take that into account when buying the property. You cannot then later complain of a loss of value when your neighbour elects to realise the full potential of his property by building up to 2½ storeys. That’s exactly what happened in this case, and the Court ruled against the affected owner as being unable to show that the municipality had acted wrongly in approving the plans. Don’t buy a property without first considering all relevant building restrictions in the area! And, because plans could well have been approved without any notice to you, seek legal advice urgently if you become aware of any new construction in the area that concerns you. (Marais, Muller Yekiso newsletter)
More
News
|
