Land Use Rights and the Payment of Engineering Contribution Figures | Legal Articles

 

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Land Use Rights and the Payment of Engineering Contribution Figures

Section 20(2)(c)(1), 48, 63 and Chapter 5 of the Town Planning and Township Ordinance 15 of 1986 (“the ordinance”) deals with the levying and payment of engineering contribution figures.

Property owners who apply for rights to change the use of their property will have to pay these amounts in order to help with the upgrading of engineering services, such as roads, sewers and parks.

 

The amendment of the land use rights

Every applicable town planning scheme will contain specific properties default land use rights for that township.

The town planning scheme determines what every property can be used for legally. If the owner of the property wants to amend these rights or add more rights other than what is prescribed, an application can be lodged to amend or obtain these rights.

If the application is granted it will result in an amendment to the “master” town planning scheme, or as more commonly referred to as the amendment scheme. Every property where different rights are obtained has its own amendment scheme approved for.

An application can be made by the owner - or the person acting on behalf of the owner - where the future intended use of the property is not catered for. 

An application can be made for consent use, where consent is obtained for the intended use from the municipality, provided the land can be used in the manner proposed.


The other application can be for rezoning where the existing land use rights provide that the land cannot be used for the proposed use and one must apply for a different zoning in order to ensure the future use is lawful. 

Both applications are made on prescribed forms against payment of the prescribed fee and with certain prescribed supporting documentation. Click here for prescribed documentation and fees.

The Land Use and Management department of the municipality will decide on the application after circulating it for comment to all relevant internal departments.

A decision is then made to grant or deny the application in whole or in part and conditions may also be attached such as the payment of amounts for engineering contributions. If the applicant is not satisfied with the outcome of the application they may appeal.

When the applicant is satisfied with the outcome of his application he submits a document called “MAP3’s. This is the draft amendment scheme. 

When the municipality is satisfied that all conditions and laws have been complied with, it will publish a notice stating that the land use rights applicable to the property have been amended. This is called a “promulgation”. Only on promulgation does the amended land use rights come into effect.

At what point is engineering contribution figures calculated?

This should happen before the applicant is advised of approval to enable the applicant to budget for the financial consequences of going through with the rezoning application. In practice, this is not always the case and engineering contribution figures are only calculated after approval.

Municipalities will, however, ensure these figures are always ready before promulgation. 

Who pays?

The Ordinance provides that engineering contribution figures payable as result of the approval of consent use, the person to whom consent is granted must pay.

If rezoning occurs, the owner must pay. If a developer applies on behalf of a land owner, the developer must pay.

Who can make a demand for amounts payable?

An amount for engineering contribution figures may be levied either in agreement with the applicant or the amount will be determined by the Services Appeal Board of the municipality. 

Where the proposed land used will bring about a higher density of dwellings, then the municipality will determine the amounts payable. 

What is the amount that can be demanded?

Any amount deemed necessary to upgrade the engineering services to the property in order to facilitate the upgrading for the proposed land use.

What if the amount demanded is unreasonable?

An appeal can be lodged by the owner/applicant/interested party.
Who can lodge the appeal in which circumstances and to whom the appeal lies varies on what type of application is brought and by when?

What if the engineering figures make the development too expensive?

The owner can apply to repeal the amendment of the town planning scheme. 

The owner can apply to change the land use rights to a zoning that requires fewer upgrades and engineering services.

When and how can payment of engineering contribution figures be demanded?

The municipality can demand payment within 30 days of promulgation.

This is subject to that if there were objections or amendments that the amended scheme will only come into operation on a date not less than 56 days from publication of the notice.

When do engineering contribution figures become payable?

Engineering contribution figures are payable before a clearance certificate is issued, building plans approved or the additional or altered land use rights are used.

Can payment arrangements be made?

Yes, a municipality is empowered to allow payment in instalments for a period up to three years or to postpone payment for a period up to three years. A municipality can also obtain an undertaking from a purchaser that he will pay at a later date allowing transfer to go through.

What are the consequences of non-payment?

The additional land rights may not be legally used even if approved and promulgated. 
Can rezoning be finalised without payment of the engineering contribution figures?
Yes, in fact, it must. The last step in rezoning is promulgation and only after promulgation can the municipality legally demand engineering contributions.

Engineering contribution figures prescribed

There is no law on this issue, but in the writers view they are “fees” charged by a municipality for the supply of services or upgrades. However, buyers are cautioned to rather enquire and check whether they will become liable for engineering contribution figures at some stage in the future.
 

If you have any questions with regards to amending land use rights, or the payment of engineering contribution figures, contact a property attorney at Van Deventer & Van Deventer Incorporated today.

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


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