How Does The Drought Affect Property Transactions?

The current drought in Cape Town creates a practical and legal problem in that the seller in most instances cannot deliver the property to the purchaser in the same condition it was at the time of sale, specifically the garden and swimming pool.

The seller furthermore has a duty to obtain a water certificate if the property is situated in the area of the Municipality of the City of Cape Town.

A.  CONDITION OF POOL & SWIMMING POOL

The general common law rule is that the purchaser is entitled to receive the property in the same condition in which it was at the time of sale.  There is normally a delay of 2 (Two) months from date of sale until the date of transfer, and in that time the garden and/or the pool can seriously deteriorate as a result of the strict water restrictions which have been imposed by the Municipality of the City of Cape Town.  The general common law rule is that the seller remains responsible for the maintenance of the property until registration of transfer, or until date of occupation should that be prior to transfer, and then only in the event if the Deed of Sale stipulates that risk passes to the purchaser on date of occupation.

Cape Town DroughtThe circumstances are now however, that it is impossible for the seller to deliver the property to the purchaser in the same condition as it was at the time of sale by virtue of the following:-

  1. 1.  Unforeseen circumstances;
  2. 2.  Circumstances outside of the sellers control which makes proper delivery impossible;
  3. 3.  Natural causes or Legislative action.

In the above circumstances the common law prevents the purchaser from demanding performance when that performance (which is the delivery of the garden and swimming pool in the same condition as it were at the time of sale) has become impossible due to unforeseen, supervening circumstances outside the sellers control.  The Municipal  bylaws in respect of water restrictions have prohibited the watering of gardens and filling of swimming pools and those supervening circumstances have rendered it impossible for the seller to perform his obligations.  The purchaser would accordingly not be able to either:-

  1. 1.  Stop the transfer; or
  2. 2.  Demand that the seller reinstates the pool and garden its former condition.

We would recommend that a clause be inserted in the Deed of Sale to protect all parties, which could read as follows:-

“The purchaser acknowledges and accepts that (notwithstanding the seller’s duty to maintain the property in the same condition as when the offer was accepted, pending the passing of risk, save for fair wear and tear), that due to water restrictions imposed by the municipal authority, the swimming pool, garden and all dependent features (if any) will on date of registration of transfer, not necessarily be in the same condition as when purchased and hereby waives any claims against the seller in this regard for as long as these restrictions apply.  Any deterioration as a result thereof, will be deemed as fair wear and tear.”

A similar provision should be inserted in a Lease Agreement to stipulate that it would be impossible for the tenant to fulfil his normal obligations to maintain the garden and pool.

  1. B.  WATER CERTIFICATE

The Municipal bylaws furthermore stipulate that a water compliance certificate must be provided to them in respect of every property transfer within the jurisdiction of the Municipality of Cape Town. This requires an inspection of the water installation on the property by a qualified plumber who will inter alia test if the water meter records the flow when water is drawn and that the meter does not register when consumption stops.  This means that running water is necessary for the test to be completed.  It would accordingly be impossible for the water compliance certificate to be issued when Day Zero arrives, which means technically that a transfer cannot be registered as the Municipal bylaw cannot be complied with.  I would therefore suggest that a term be added to agreements of sale that it would be the seller’s obligation to obtain the water compliance certificate once the normal supply of water has been resumed, unless the Municpal bylaw is amended prior to Day Zero.

Kindly contact Francois Tredoux at Miltons Matsemela on 021 671 5141 should you require further information.

 

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