1. There is currently existing uncertainty amongst some of the role-players as to when land use rights, which stem from the rezoning to subdivisional area, are regarded as confirmed or unconfirmed. I would like to give more detail below to clear up any uncertainties. In order to understand the concepts clearly, it is crucial that the different sections of the Ordinance referred to, are read in context with one another.

2. In terms of section 22(1)(a), no application for subdivision involving a change of zoning, may be considered unless the land has been zoned in a manner which permits subdivision. Under section 16(2)(a) of the Ordinance, a rezoning, which was granted for the purpose of subdivision, lapses if an application for subdivision, in accordance with the rezoning concerned, is not submitted to the municipality within 2 years after the rezoning was granted.

3. In terms of section 22(2), on the confirmation of a subdivision or part thereof in terms of section 27, the said subdivision or part thereof is deemed to be a substitution scheme in terms of section 14(4); provided that the provisions of section 14(4)(c) (advertising, etc.) do not apply. Confirmation as contemplated in section 27(1), implies that, within 5 years after the approval of the layout plan, a general plan must be approved by the Surveyor-General and the requirements of the Registrar of Deeds must be complied with for the registration of one land unit. In this regard it is important to take into account that the registration can only take place after compliance with all conditions imposed on approval of the layout plan in terms of section 42.

In practical terms, the zonings as indicated on the layout plan thus substitute the previous zoning of the land. However, if clearance is granted to transfer one unit while all conditions have not yet been complied with (which is, technically speaking, legally invalid, but it does happen erroneously in practice), it does not mean that, due to the transfer of one land unit, the whole subdivision is confirmed. Section 27(2) clearly states compliance with conditions (as opposed to issuing of the clearance certificate) as norm for confirmation of the layout (or part thereof), and further states that where there was compliance with the conditions in respect of only a part of the layout, the rest of the layout in other words those land units in respect of which there has not yet been fully complied with the conditions, lapse. Therefore compliance with conditions, and not clearance for the transfer of one land unit, is the norm for confirmation of land units and thus also for the perpetual retention of their zoning according to the layout plan as explained below.

4. If the approved rights as per approved layout plan are not exercised, use rights, which, in terms of section 14(4)(b), stem from a substitution scheme, lapse after expiry of a period of 5 years after it originated, to the extent that it was not exercised. Subject to the applicable provisions of section 7 and section 14(2), land in respect of which the use rights, granted by way of a substitution scheme, have lapsed, are deemed to be zoned in accordance with the utilisation thereof as determined by the council concerned (However, it should be noted that the council cannot make any determination here, but is bound by certain principles contained in section 14(3) and (7)).

5. It is also important that the sections referred to above be read with the following definitions: "exercise" means to utilise in terms of a use right;"land" means land with or without improvements;"land unit" means a portion of land registered or capable of being registered in a deeds registry and may include a servitude right or lease; "use right", in relation to land, means the right to utilise that land in accordance with the zoning thereof, including any departure; "utilisation", in relation to land, means the use of land for a purpose or the improvement of land, and "utilise" has a corresponding meaning.

The most important (but not the only) implication of these definitions, read together, is that the erection of a top structure is not necessarily a requirement for utilisation. It is indeed so in the case of an ordinary rezoning in terms of section 16, but in the case of a subdivision, the installation of services to make the subdivision feasible, can also be regarded as utilisation.

6. If the owner fails to comply with the provisions of section 27(1) regarding a subdivision or part thereof, the granting of the application under section 25 shall be deemed to have lapsed. The general plan must then be amended in accordance with the requirements of the Surveyor-General. This requirement naturally places an obligation on municipalities in cases where the whole layout is not provided with at least the infrastructure as per the conditions. Indirectly the section places an important obligation on municipalities and it has important implications, especially in respect of phasing, as well as the amendment of conditions. It will be discussed later and, if necessary, will be discussed further by way of another circular.A prevailing principle is of course that single residential erven in such a subdivisional outlay can never lose their zoning - due to the principle contained in section 14(8). Thus the principles explained in this circular, apply to erven other than single residential erven.

7. There are now different questions that may arise from the above and in order to be of assistance to municipalities in the interpretation of the above-mentioned provisions, the following information and guidelines are furnished:

7.1 Certain circumstances under which use rights lapse / do not lapse

7.1.1 If a portion of land has been developed (utilised) in accordance with the rezoning conditions, that portion of land is naturally being utilised properly and the rezoning does not lapse after 5 years.7.1.2 If a portion of land has not been developed by the erection or alteration of structures (and the land is also not being utilised in accordance with the rezoning conditions), but that portion of land is properly provided with services in accordance with conditions imposed, it complies with the requirement of "utilisation" and the rezoning does not lapse after 5 years.

This conclusion is plain, given the definitions of "utilisation", "land" and "land unit" in the Ordinance.

7.1.3 If different uses are allocated to different land units, it does not necessarily follow that if one land unit complies with the requirements of "utilisation", that the other land units will automatically comply with the requirements. A single approval can, e.g., allocate use rights to different land units for single residential and business use. If a land unit, which is to be subdivided into single residential plots, complies with the requirements of "utilisation", it does not necessarily follow that other land units, which are subdivided or will be utilised under the same approval for single residential or business plots, comply with the requirements of "utilisation".

This situation is defined in sections 27(1) and (2) of the Ordinance. It must also be noted that a land unit must comply with the qualitative as well as quantitative requirements of "utilisation". This means, e.g. with reference to section 27(1), that all services, as required by conditions of approval, must be installed and secondly, that the services must be fully installed (except to the extent that the conditions of approval may provide for payment of money or the provision of guarantees in place of the physical installation of services - in which case such payment or guarantees of course have the same meaning as physical services).Land portions, in respect of which the conditions of approval have been fully complied with, will thus be deemed as being utilised, while land portions which do not fully comply with the conditions of approval, cannot be deemed as being utilised.

7.2 What is the zoning of the land units concerned after the use rights have lapsed?

In this regard it is important to clearly differentiate between land which still falls within the protection period of a lapse clause (e.g. section 14(2)), the so-called "grandfather clause", on the one hand, and on the other hand, all other land. If use rights, which originated from a substitution scheme, lapse, the subsequent use right can be a use right that was formerly imposed in terms of a section 7 scheme and that has not yet lapsed (in such a case, e.g. land that is subjected to the "grandfather clause", there is no choice - lapsing must be back to the protected zoning) - if not, then a use right in accordance with the use thereof as determined by the council.

7.3 Position in respect of resort development

In the case of resort development where no cadastral subdivision takes place, such as in the case of the letting of units, timeshare or sectional title, the rezoning lapses in terms of the provisions of section 16. Use rights, in respect of resort zoning, which is indeed approved for purposes of subdivision, lapse under the circumstances as set out in paragraphs 6, 7.1 and 7.2 above.

7.4 How can phased development contribute to orderly planning and avoidance of development problems?

Where a subdivision of reasonable proportions is concerned, it is almost always necessary that conditions of approval include phased development. This will prevent bigger units from not being fully utilised for long periods. Furthermore, developers will be enabled to comply more easily with conditions of approval as determined by section 27(2) and thus use rights will not lapse.

8. In view of the above-mentioned it is clear that the lapsing of use rights in the case of rezoning to subdivisional area must be treated with great circumspection. Care must be taken especially in case where land units have not been fully provided with services according to conditions of approval, as a land unit can only qualify fully for use rights or not at all. There is no such thing as a land unit "coming close to qualifying for utilisation" or "qualifies 90%". A land unit is either utilised or not utilised. If, in respect of 90% of the land units, there has been full compliance with the conditions and in respect of the remaining 10% either no compliance at all or only partial compliance, then the first 90% is utilised and the remaining 10% not utilised. The former land units then retain their zoning in perpetuity, and the latter part of the layout lapses in terms of section 27(2), and thus the zonings concerned also lapse in terms of the principles contained above.

9. It is trusted that the above-mentioned sheds more light on this issue.

HEAD OF DEPARTMENT
DATE: 13 January 2003