An occupancy certificate is confirmation by the local authority that the building complies with approved building plans, and if this is not in play, the municipality can, under law, prevent occupancy by any person, be that a renter or the new owner.
The occupancy certificate should be acquired by the seller ideally before marketing the property and it is the right of a buyer to insist on a clause being inserted into the sale agreement, requiring the seller to produce this document.
Safety first
The occupancy certificate is an important step in the process of buying or renting a property. It is formal approval that the property is ‘safe’ for occupancy, indicating that that construction is sound. This applies to the original construction and/or any renovations or additions, which should also align to approved building plans.
An occupancy certificate does not, however, guarantee that the property is free from defects, which is remains the responsibility of buyers who should undertake their own due diligence to ensure the property is good condition. The inspection is undertaken by a municipal building inspector who will check for structural soundness and compliance, storm water, land levels etc, as well as other aspects including electrical, plumbing, and gas installations, glazing, roof trusses, and fire hazards (in the case of thatching).
Acquiring the certificate
- Application is made to the local government authority (municipality). Payment of the required fee by the existing owner of the property, or the builder or project manager, if that is agreed.
- A municipal building inspector will visit the property, inspect it and produce a report on the condition.
- Any repairs or improvements identified, must be corrected, and a new inspection may be required to confirm these changes comply with the regulations.
- Only once the property is approved as meeting all the required standards, and certifications exist (such as an electrical certificate) will the municipality issue the occupancy certificate.
- Application for the certificate can also be made by a builder or project manager who is undertaking renovations or additions to the property, or constructing a new building.
Ramifications of not having an occupancy certificate
Many buildings and houses are sold and transferred to purchasers without an occupancy certificate, but this is an unwise move.
The consequences may be dire, such as:
- Being ordered to vacate the building.
- Orders to demolish the structure.
- Denial of building insurance or insurance claims.
- An application for a home loan may be denied.
- Municipal penalties may be imposed for non-compliance.
- Being denied water/electrical connections.
The main message here is that it is a criminal offence to occupy or use a building without the authority to do so.
Responsibilities
Property Practitioners (estate agents), are required to ensure that the seller completes a Mandatory Disclosure form. This provides sellers with an opportunity to state what they know to be defects on the property.
Regardless that properties are usually sold as Voetstoots (as is), purchasers are advised to ensure that a clause is contained in the Offer to Purchase that the seller should provide a copy of building plans, and the occupancy certificate. Renters are also entitled to request a copy of the occupancy certificate.
The occupancy certificate is a vital document and sellers should plan ahead in terms of applying for one as time-frames in its acquisition vary between municipalities.
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