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06 Jun 2022

ASBESTOS REGULATIONS – WHAT DOES THIS REALLY MEAN FOR PROPERTY PRACTITIONERS AND SELLERS/LANDLORDS?

It has come to our attention that an asbestos inspection company is sending emails to estate agents stating that it is now mandatory for sellers and landlords to “disclose the presence of any asbestos materials in a property, before entering into a new sale or lease agreement”. The article also states that the Property Practitioner Act requires sellers and landlords to disclose the existence of all defects. It therefore suggests that the mere existence of asbestos, is a defect, and that this must now be disclosed. The author relies on the recently published Asbestos Abatement Regulations to substantiate this view. (Read here to view our previous publications on this topic – Asbestos roofing article

We disagree with the views expressed in this article.

The regulations do not in any way oblige sellers or landlords to disclose the mere presence of asbestos. The regulations only require owners of properties which have asbestos, and which may expose workers to a risk of exposure, to have it inspected, or what to do, if they wish to treat or remove asbestos. Furthermore, it is established law that where a purchaser purchases voetstoets, the seller can only possibly be held liable for material, latent defects he actually knew of and fraudulently withheld at the time of sale, and which the purchaser could not determine himself upon a reasonable inspection.

There is not and never has been a duty to “disclose all defects”. And these PPA certainly does not change this as is alleged.

The mere fact that asbestos happens to form part of the roofing for example does not amount to a defect in any manner or form, which is what this article suggests. Assuming there is asbestos and assuming the property has been inspected, and that the asbestos has been found to be a threat, then this may need to be disclosed as a defect. At best, agents may want to possibly add some further questions to their condition reports, along the lines of:

Does the property have any asbestos that you are aware of which could also expose a worker to any risks associated with asbestos?

If so, has the property been inspected in terms of the Asbestos Abatement Regulations and can you provide a copy of the report?

If the seller cannot answer these questions to a purchaser’s satisfaction, then it is for a purchaser to decide whether to make an offer or to attach any further conditions in this regard, if so inclined.

We hope this will clarify any confusion which this article may cause.

03 Jun 2022

Landlords: Zoning Law Contravention Could Invalidate Your Lease

Here’s a warning to property owners to know and comply with your local municipal zoning laws. Contravene them at your peril.

For example, as a landlord you could be left with an invalid lease, and no claim against your tenant for arrear rental, municipal service charges, or anything else. That’s exactly the fate that befell a landlord recently when a High Court ruled in favour of a tenant whose business (“coffee shop, home industry and restaurant”) fell foul of the “Single Residential 2” zoning that applies to the leased premises.

We discuss the outcome in that case and end off with some practical suggestions for both property buyers and landlords.

“…it is a general rule that a contract impliedly prohibited by statute is void and unenforceable…” (extract from judgment below)

Here’s yet another warning from our courts of the importance of complying with your local municipal zoning laws, whether you buy property to live in, as a capital investment, or to let out.

One risk for a landlord is finding yourself with an invalid lease and no claim against your tenant. A recent High Court decision illustrates –

The unlawful coffee shop and the invalid lease

  • A landlord rented premises to a tenant for use as a coffee shop, home industry and restaurant. The tenant also resided on the premises, but no rental for the residential component was specified in the lease.
  • The business use was contrary to zoning provisions indicating that the property could only be used for dwelling purposes as it was zoned “Single Residential 2”.
  • The landlord, although aware of the zoning restrictions, told the tenant that she could operate her business.
  • When the landlord sued for arrear rental and payment of municipal charges the tenant’s defence was that the lease was invalid and unenforceable.
  • The High Court (hearing an appeal from the Magistrate’s Court) held the lease agreement to be illegal, void and unenforceable. The tenant, it said, could not be expected to establish from the municipality, before entering into the lease agreement, whether the premises could be used for her business. She had seen other restaurants in the same street and had no reason to question the landlord’s right to allow her to trade as she did.
  • As to the applicable law, the Court found that “although it is a general rule that a contract impliedly prohibited by statute is void and unenforceable, this rule is not inflexible or inexorable [inevitable].” The Court’s analysis of when this will apply (and when it won’t) will be of great interest to property professionals, but for most landlords the important thing is the fact that your lease will normally be invalid when it contravenes local legislation.
  • In that event, you will have no claim against your tenant because, as the Court here put it “this court shall not countenance unlawful conduct by allowing the [landlord] from benefiting from an illegal contract.”
  • Bottom line – the coffee shop tenant is not liable for rental, nor even for municipal charges relating to her occupation and use of the premises.

Zoning – what to do when buying or letting out property

The bottom line is that you need to understand all local zoning restrictions before buying property or letting it out to a tenant. If as a landlord you are aware of a possible issue in this regard, take professional advice on whether you may be able to word the lease in such a way as to protect you from losing all your claims against the tenant should worst come to worst.

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