Property practitioners, and more importantly, sellers, should be aware that municipal approval does not necessarily mean that a property owner is legally entitled to proceed with a particular development or use of a property.
A property’s title deed may contain restrictive conditions limiting how the property may be used, developed or subdivided. These conditions are registered against the title deed and remain binding on successive owners.
Importantly, restrictive title deed conditions can take precedence over municipal approvals. This means that even where a municipality has approved building plans, rezoning or a particular land use, the owner may still be acting unlawfully if the proposed development conflicts with a restrictive condition contained in the title deed.
For property practitioners, this is particularly relevant when marketing properties with development potential. Before making representations about what a purchaser may be able to build or do on a property, it is advisable to check both the applicable zoning and the title deed conditions.
Municipal approval alone is not enough. Where a restrictive condition conflicts with the intended use, the condition may first need to be formally removed through the appropriate legal process, which will attract costs for the seller’s account and can delay a transfer.
The takeaway: Always check the title deed before marketing a property’s development potential.