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Compliance Certificates

Compliance Certificates

 

When an immovable property is sold, certain compliance certificates must be obtained prior to registration or transfer of the property. A summary of each of the compliance certificates in the context of conveyancing is set out below. The certificate is however transferrable. Once it has been issued, there is no need to obtain a new one upon change of ownership.

 

The Property ‘Big 5’ of Certificates of Compliance

 

Sale agreements provide for up to 5 compliance certificates to be obtained before a property transfer is registered. These apply to Full Title and Sectional Title properties. Here is a summary of each:

 

 

 

 

Electrical

 

  • Certifies that the electrical installation on the property complies with the required safety standards
  • Governed by the Occupational Health and Safety Act
  • The certificate must not have been issued more than two years prior to the transfer date, provided there have been no modifications to the installation since being issued
  • Parties cannot contract out of this or agree to waive the requirement, however they may agree that the responsibilities in respect of the installation be transferred from the seller to the purchaser (where the purchaser is undertaking a big renovation after transfer)
  • Regulations state property owners may not allow the transfer of ownership without the certificate. Parties may however agree in the Agreement of Sale that it is the purchaser’s responsibility to obtain it, provided it is done before transfer

 

Electric Fence

 

  • Certifies that the electric fence installation complies with the required safety standards
  • Governed by the Occupational Health and Safety Act
  • No set period of validity, but an existing certificate may be transferred by the seller to the purchaser. A seller need only to provide a new certificate to the purchaser if a change was made to the installation after the current certificate was issued
  • The requirement also applies to sales of sectional title units if there is an electrical fence system situated on common property

 

Water/Plumbing

 

  • Certifies that the water installation at the property is in line with municipal and building guidelines
  • Governed by the City of Cape Town water bylaw. Only applicable to transfers within the municipal jurisdiction of the City of Cape Town
  • No set period of validity. A new certificate must be obtained every time there is a change of ownership
  • Parties cannot contract out of this or agree to waive
  • Seller is required to submit the certificate to the City of Cape Town prior to transfer

 

 

Gas

 

  • Certifies that the gas installation on the property complies with the required safety standards
  • Governed by the Occupational Health and Safety Act
  • No set period of validity. A new certificate must be obtained every time there is a change of ownership
  • Parties cannot contract out of this or agree to waive
  • Seller is required to obtain the certificate prior to transfer. Best for the inspection and remedial work to be carried out as soon as possible after the deal is concluded due to bank and bond requirements and obviously prior to the purchaser moving in. However, the parties can agree it is the purchaser’s responsibilities to obtain

 

Beetle

 

  • Certifies that the accessible wood of permanent structures on the property are free from certain wooddestroying beetles
  • Not governed by any law, but a practice that has evolved over the years
  • Parties agree contractually on the validity period of the certificate once issued
  • Parties can contract out of this, however if parties agree that no certificate is necessary and bank requires it for purchaser’s bond, then that it’s for the purchaser’s expense
  • Seller is required to obtain the certificate prior to transfer. Best for the inspection and remedial work to be carried out as soon as possible after the deal is concluded due to bank and bond requirements and obviously prior to the purchaser moving in. This is generally required in coastal areas

 

Gas and / or Electricity Certificates: Whose Responsibility is it?

 

The requirement of Gas and/or Electricity Certificates remains a contentious subject and has been debated over for many years. The seller is usually responsible for providing an electrical certificate in terms of the stipulations in the sale agreement between the parties.

 

In the terms of Section 7(5) of the Occupational Health and Safety Act 1993, “the user or lessor may not allow a change of ownership if the certificate of compliance is older than 2 years”. In such a case, the seller has to appoint a competent electrician to issue the certificate of compliance meeting the requirements of the regulations. If any work is required to meet such requirements it would be for the account of the seller. In the event of a sale or rental the “user” is not always the registered owner and therefore the person with whom the responsibility lies is unclear and an issue of contention. Although the aforementioned may indicate a statutory responsibility for the issuing of an electrical certificate, it does not indicate the seller per se is liable for the costs incurred in obtaining such certificate. This should be regulated by the sale agreement. A further requirement regarding the obtaining of a certificate of compliance with respect to a gas installation was published in 15 July 20019 by means that such certificate has to be issued by an authorized person confirming the conformity of gas installation or modification, in the event of a change of ownership of the property. The Regulation also fails to indicate who should therefore be regulated by Sale of Agreement.

 

 

 

 

The fact remains that a purchaser cannot obtain finance without submitting a certificate of compliance that is not older than 2 years. The same applies to gas installations.

 

Make sure then, that the electricity or gas installations comply with safety regulations before entering into a Sale Agreement. Also determine, by stating clearly in the Sale Agreement, who will be liable to obtain and pay for the necessary certificate as this will pave the way for a smoother process of registration.

 

 

Certificate Requirements for Electric Fence Systems

Regulation 12 of the Electrical Machinery Regulations 2011 imposes an obligation on the user of an electric fence system to have certificate compliance. The requirement does not apply to a system installed prior to 1 October 2012, however, this certificate will be required where an addition or alteration is made to the system or where there is a change of ownership of the premises on which the system exists, if change of ownership takes place after 1 October 2012.

 

The electric fence system certificate is separate from a electrical compliance certificate and is therefore an additional requirement if the property has an electric fence system. It will also be necessary to include an appropriate clause in the Sale Agreement concluded after 1 October 2012 if there is an electric fence system on the property. A transfer registered after 1 October 2012 therefore triggers the obligation to provide a certificate. It will thus be necessary to arrange for an electrical fence system certificate if an electric fence system exists on a property that is in process of being transferred.

 

 

 

 

The certificate is however transferrable, once it has been issued, there is no need to obtain a new one upon change of ownership.