In property transactions, most buyers and sellers understand the importance of approved building plans. It is one of the first checks made when preparing a property for sale or applying for a home loan.
However, there is a critical and often overlooked factor that can delay - or even completely derail - a transaction: consent for use.
We are increasingly seeing transactions encounter serious challenges not because the structures are illegal, but because the use of those structures has not been approved by the municipality.
Understanding the Difference: Structure vs Use
Approved building plans confirm that a structure has been lawfully built in accordance with municipal regulations. They deal with the physical aspects of a property - its layout, size, and compliance with zoning requirements.
Consent for use, however, relates to how that structure is legally permitted to be used.
A common example is an outbuilding that was originally approved as a shed or storage space. While the structure itself may be compliant and correctly reflected on the plans, problems arise when that space is later converted into a flatlet or rental unit without obtaining the necessary municipal consent.
From a legal and banking perspective, this is not a minor change. It is a material change in use.
Why This Becomes a Problem
Many property owners assume that if the structure appears on approved plans, everything is in order. Unfortunately, this is not the case.
When a space is used as a dwelling, it typically includes plumbing, electrical installations, kitchens, and bathrooms. This effectively changes the nature of the structure from a non-habitable space into a habitable one.
Banks are particularly sensitive to this distinction. When assessing a property for financing, they are not only concerned with what exists physically, but also with whether that use is legally permitted.
Where there is a mismatch, such as a shed being used as a flatlet, banks may decline the bond application or require the issue to be resolved before proceeding. This often leads to delays, renegotiations, or the collapse of the transaction altogether.
The Reality of Fixing the Issue
Correcting an unauthorised use is not a quick administrative exercise. It typically requires a formal application to the municipality for consent for use, rezoning, or approval of a second dwelling.
This process involves submitting plans, motivations, and supporting documentation, and can take anywhere from 12 to 18 months, sometimes longer depending on the municipality.
During this time, the property may not be capable of being sold with bank finance, which places both buyers and sellers in a difficult position.
What Sellers Should Be Aware Of
Before listing a property, it is no longer sufficient to confirm that approved plans are in place. Sellers should ensure that every structure on the property is being used in accordance with its approved purpose.
If any outbuildings, garages, or additional spaces have been converted into living areas or rental units, it is important to verify whether the necessary consent has been obtained. Addressing this upfront can prevent significant delays later in the process.
What Buyers Should Ask
Buyers should go beyond requesting approved plans and ask a more specific question: whether all structures on the property are approved for their current use.
If there is any uncertainty, further investigation is essential. Proceeding without clarity may result in financing challenges or the need to rectify the issue after purchase, both of which carry financial and timing implications.
A Practical Legal Insight
A property is not defined only by what has been built, but also by what is legally permitted.
There is a clear distinction between structure and use, and both must be compliant for a transaction to proceed smoothly.
Final Thought
This is one of the most common and misunderstood risks in property transactions. Approved plans alone do not guarantee compliance.
Ensuring that the use of every structure aligns with municipal approvals is essential to avoiding delays, declined bond applications, and failed transactions.
**Van Deventer Dowlath & Marx Incorporated (VDM),** we work closely with buyers, sellers, and estate agents to identify these risks early and ensure that transactions are structured correctly from the outset.
If you are unsure whether a property is compliant, or require guidance on how to proceed, our team is available to assist.