Failing to ensure that a property for sale is zoned for business use, can land both buyers and estate agents in hot water
Residential properties are often marketed as being “perfect for a home office” or “ideal for business use”, but often these words are merely false advertising as not all residential properties are zoned for business use.
Both buyers and estate agents are therefore warned of the danger associated with not checking that a property they are buying or selling for commercial use is correctly zoned.
According to PJ Veldhuizen, chief executive of Gillan and Veldhuizen attorneys, which has a specialist conveyancing and property law division, zoning scheme regulations are aimed at achieving systematic and rational development of land and land use in an area of jurisdiction.
The purpose, naturally, is to achieve a proper balance between competing rights and the interests of residents.
Part III of the zoning scheme regulations serves to determine use zones and the uses to which property in those zones may be put, while Regulation 3.11 allows for the practice of a profession or occupation from home, she says. Professionals such as lawyers, doctors, dentists or architects often opt for this type of property as it is most suitable for their commercial needs.
Veldhuizen says in a recent case in Grahamstown, a court ruled that the owner of a day spa, who was operating her business from her home, was in contravention of the zoning scheme regulations and interdicted her from using her property to trade as a business. She adds that it is “reckless” for estate agents to advertise such properties without checking with the town planning division on zoning rights.
“Often estate agents will be told by a seller that the commercial rights are sound and will not do their own due diligence and check the facts. Estate agents and sellers could find themselves in trouble as a complaint could be laid at the Estate Agency Affairs Board and, furthermore, a claim could be made against the seller due to a fraudulent misrepresentation.”
Re-zoning of a residential property for business use is a specialised service which requires the assistance of a town planner and usually an attorney, and follows a process that is neither speedy nor simple. As a result, business owners can find themselves unable to run their businesses while waiting for re-zoning approval.
For this reason, Veldhuizen advises prospective buyers firstly to request the title deed of the property they are looking to buy, and secondly, to check the rights with the city’s zoning map.