Advice and Opinion

Check premises title deeds for business restrictions

With densification and higher traffic volumes on many roads in Cape Town, some of the houses on these have been turned into business premises, but this is sometimes opposed by the neighbourhood’s residents, says Lanice Steward, managing director of Knight Frank Anne Porter. The reason for their objection is often that it would result in the area being completely uninhabited at night which could lead to increased crime in the area.

However, she says, other areas have successfully integrated office and residential buildings into one area as can be seen in some parts of Claremont, Kenilworth, Woodstock and Observatory.

The main thing to be aware of is the zoning of the building and to check whether it is general business, and whether there are any restrictions that are in place, such as medical or legal practice, etc.

Sometimes, there are, as illustrated in a recent Smith Tabata Buchanan Boyes law update newsletter, cases where title deed restrictions have been ignored and it shows how important it is to use the land as prescribed.

The case mentioned was the Municipality of Mossel Bay v The Evangelical Lutheran Church and Another, where there was a condition in place that if the owner ceased to use the property for education or church purposes, the land would go back to the Municipality.

The wording was clear in the conditions it stated that ‘(B)(1) The property in question shall be used solely for church or educational purposes, provided that in addition to any church or school buildings erected on the land, a parsonage or a caretaker’s house may be erected;(2) The land shall be used solely for the purposes set out in (1) above. If at any time it ceases to be used for such purpose, or is no longer required for such purpose, it shall revert to the Council without payment of compensation of any improvement effected on or to the land.’

The church had built a school and an outbuilding and had used it for education purposes until 2005, after which it then stopped and the buildings became vacant and run-down.

Even though the church had intended to reinstate their use as an education facility, the municipality went to court to apply for a re-transfer because of the church’s non-compliance. Initially the court found in favour of the church but on appeal it was concluded that the church’s breach in contract could not be salvaged. The appeal succeeded in the municipality’s favour and the property had to be transferred back to the municipality.

Although this is an unusual case, said Steward, the principle applies to most.

With departures on properties, they often lie with the doctor, therapist or lawyer that applied for it initially, so if buying such a property check that it lies with the property and not with the owner, she advised.

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