What You Need To Know About Occupancy Certificates
The National Building Regulations and Building Standards Act 103 of 1977 (the Act) requires that an Occupancy Certificate be issued by local government for every building before it can be occupied. The importance of the Occupancy Certificate is that it is a certificate from such authority that the building was completed in accordance with approved building plans, that all conditions of approval and other Municipal requirements have been met and that all necessary compliance certificates (structural completion, electrical, plumbing, gas and so on) have been issued.
Unfortunately, the reality is that not all buildings or houses have approved building plans or Occupancy Certificates and are often sold and transferred to Purchasers without it. This has in some cases led to litigation having been instituted by Purchasers against Sellers in the High Court, which could have been avoided.
An Occupancy Certificate also known as a Certificate of Occupation is, however, not only required for newly constructed buildings. It is also required after renovations, alterations, or extensions were undertaken relating to the original approved building. To obtain an Occupancy Certificate, the owner of a property must apply to the local Municipality or City Council, together with the required documents and payment of prescribed fees. An inspector will then do an inspection of the property to ensure that it meets all relevant building and safety codes. If the property passes the inspection, the local government will issue an Occupancy Certificate.
If you purchase a property for which no Occupancy Certificate has been issued and you later decide to do renovations or extensions, you will most likely encounter problems with the Municipality and could end up having to pay for repairs or alterations to the structure of the property before an Occupancy Certificate will be issued. The lack of such certificate could also affect your property insurance and the premiums thereunder.
In a recent High Court case of Werner and Another v Barnard N.O. and Others (8903/2021P) [2023] ZAKZPHC 32 (17 March 2023) the Purchasers (Mr and Mrs Werner), who already took transfer of the property, wanted the High Court to order the Seller (the executrix of a deceased estate) to be ordered to obtain and provide them with an Occupation Certificate. According to the facts of the case the building inspector informed the Purchasers via email that the property was not fit for occupation and demanded them to vacate the house immediately as number of compliance certificates were still outstanding.
The Municipality also threatened to demolish the property because of the lack of an Occupation Certificate. The Court, in dismissing the application and in reference to the case of Wierda Road West Properties (Pty) Ltd v Sizwe Ntsaluba Gobodo [2017] ZASCA 170, 2018 (3) SA 95 (SCA) where Majiedt JA referred in particular to section 14(1A) of the Act, held that the Act does not expressly place a prohibition on the occupation of a building for which no Occupancy Certificate has been issued.
According to the Judge it merely creates a statutory offence for which the owner can be fined.
The Court held that:
- The executrix had no knowledge of the lack of an Occupancy Certificate when entering into the Sale Agreement;
- the applicants clearly received vacant possession of the property as was purchased by them;
- the applicants had no concerns about what they were purchasing;
- that there was also no indication in the court papers that the applicants enquired about an occupancy certificate at the time of the sale, or prior to taking transfer, and
- that they had alternatives available to them as set out in section 14(1A) of the Act.
When concluding a sale of property, Property Practitioners (Estate Agents) are, however, required to ensure that the Seller completes and signs the Mandatory Disclosure form wherein information about the property is disclosed to the Purchaser.
Purchasers should pay careful attention to what the Seller declares about being aware of, or not aware of, in the Mandatory Disclosure form especially with regard to the existence of an Occupation Certificate. Although properties are usually sold Voetstoots (as is) Purchasers should advisably ensure that the Offer to Purchase includes a suspensive condition that the Seller is to provide to the Purchaser with copies of both:
- a set of approved building plan/s for the property (including any renovations, alterations, or additions thereto), and
- the Occupancy Certificate for the improvements on the property they wish to purchase, to avoid future litigation and expenses in that regard.