Urban Land Use Rights – An Analysis of Engineering Contribution Figures | Legal Articles


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Urban Land Use Rights – An Analysis of Engineering Contribution Figures

Local government authorities come up with town planning schemes as part of their mandate, which involves the division and allocation of land for particular use.

The land is then developed according to the rights attached to it in terms of such allocation, which is known as zoning e.g residential, industrial, recreational, agricultural, business hub.

ubran land use rights

It often happens that a private owner of a piece of land decides to use the land for some other activity which it wasn’t initially intended for (zoning) by the local authority, or to have added rights on the same piece of land.

The aim will be to effectively alter the land use rights so that the property can be used for activities different from the allocated use on the master plan, or to simply add to the existing rights.

In this scenario, the property owner or an authorised representative must make an application to the municipality to amend the allocated rights.

The application can either be for consent or rezoning.

Application for Consent

Application for consent would apply to instances where the proposed use of the land is within the allocated rights of the land.

Application for Rezoning

Application for rezoning would apply to instances where the existing land use rights differ from the proposed activity and use of the land.

The application is then sent to the Town Planning department who will then circulate it amongst the different concerned service provision departments of the municipality, after which a decision of approval, conditional approval or denial is then reached.

If approved, further documents will then be required from the applicant (e.g MAP3) whereby the proposed amends to the town scheme are submitted for assessment.

When these amends and legal requirements are confirmed to have been complied with, the municipality will then publish a notice to inform the public that the land use rights of the property have been amended. This is known as promulgation which effectively marks the commencement of the amendment scheme.   

Costs caused by the Amendment of Land Use Rights

In relation to the amendment of land use rights, there will most likely be a need for new adaptations to suit the altered use of the land, if approved.

These can be pavements, sewers, roads etc. which all come at a cost to put in place. Levying and payment of such engineering contribution fees are dealt with in Sections 20(2)(c)(i), 48, 63, and Chapter 5 of the Town Planning and Townships Ordinance 15 of 1986.

Ideally the engineering contribution rights should be calculated before approval of the application, to put the applicant in a position of appreciating whether to go through, pause or abandon the application process.

The engineering contribution figures are determined either by agreement with the applicant, or in the absence of such agreement they will be determined by the Services Appeal Board.

In applications that will amend land use rights to cater for an increased density of dwellings, the figures are determined by the municipality.

Any amount that is necessary for the upgrading of the land use engineering services can be levied, and if there is any aggrieved party with regards to such amount such party must appeal within a specified time frame.

The applicant can also opt to either repeal the approval or apply for amendment of rights where engineering fees are less. The municipality can only demand payment within 30 days of promulgation of the proposed change of land use rights, as that is when the amendment scheme legally commences.

Payment Arrangements can be made

A payment arrangement spanning three years, or suspension of payment for three years can be made in agreement with the municipality. Non-payment or failure to put a secure payment plan in place results in the applicant not allowed to proceed with use of the proposed land use rights.

Transfer can be passed, with exceptions, without engineering contribution fees being paid. This happens where a seller applied for additional rights which were approved but were never promulgated. If the amendment of rights was never promulgated, it means such amendment scheme never commenced.

Essentially the purchaser may promulgate and pay the engineering contribution fees if he so chooses, or not promulgate thereby leaving no basis of accountability for such payment.

However, in cases where the application for rezoning was approved and promulgated, transfer can only happen when payment of the land use engineering figures is made.

If the municipality does not demand such payment at that stage and proceeds to issue the Clearance Certificate, they may do so when the purchaser seeks to use the rights or have the building plans approved. Depending on the purchase transaction, the purchaser may recover the engineering fees from the seller if the seller did not divulge such information or included the amount for such in the sale agreement but did not pay to the municipality. If however the sale transaction provided that the purchaser will cover the engineering contribution fees, then the purchaser will have to pay those fees as agreed and make use of the rights.

Engineering contribution figures are more of fees than rates in nature, and therefore they are most likely to fall within the three-year prescription parameter though there is no legislation for this.

Van Deventers & Van Deventers Inc. – Conveyancing Attorneys Johannesburg

It is therefore advisable that any party buying property must check first whether there are any engineering contribution fees that are applicable and outstanding on the property so as to avoid the sometimes frustrating processes of having to separately claim a refund from the seller of the property who might not be available anymore, among other possibilities.  

Contact our conveyancing attorneys for expert legal advice.

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