Development Law Update
ZERO-RATING THE SUPPLY OF LOW INCOME HOUSING: WHICH PROJECTS ARE EXCLUDED FROM THIS RATING?
Commissioner for the South African Revenue Services v Amawele Joint Venture CC (908/2017)  ZASCA 115 (19 September 2018)
In September this year, the Supreme Court of Appeal handed down judgment in the above matter.
The Court was tasked with determining whether the three housing projects under the Emergency Assistance Programme (EAP) and the Rectification and Revitalisation Programme (RRP), undertaken by Amawele for the KwaZulu-Natal Provincial Department of Human Settlements (Department), were VAT zero-rated supplies. The supply of services pursuant to these contracts would be zero-rated by virtue of section 11(2)(c), read with section 8(23) of the VAT Act, which provide for zero-rating of the deeming provision of services to public authorities and municipalities funded by the Housing Subsidy Scheme as identified in section 3(5)(a) of the Housing Act 107 of 1997.
TEMPORARY LETTING OF RESIDENTIAL DWELLINGS BY DEVELOPER: IF THE LETTING PERIOD ENDS AFTER 1 JANUARY 2018, HOW MUST VAT BE ACCOUNTED FOR?
SARS Binding General Ruling (VAT) 48 – 25 July 2018
In a Binding General Ruling issued on 25 July this year, SARS clarifies how developers should calculate their VAT liability where they used the section 18B relief after letting property that was intended to be sold on the open market. The window period in which the relief was available terminated on 1 January 2018. How the VAT calculation works if the letting period ends after 1 January 2018 is addressed in the Ruling.
As many African states emerged at the end of the millennium from decades of crippling post-colonial civil wars and entered into a new period of relative stability, they faced a staggering infrastructure deficit.
Africa is the second largest continent by geographic area and the second most populated continent in the world, with a population of approximately 1.2 billion people. The United Nations estimates that Africa will see its current population of 1.2 billion people double by the year 2050. That’s an expected growth of 42 million people per year – basically Argentina’s population on a yearly basis. Africa’s population is the youngest of all the continents, with a median age of 19.7 in comparison to the global median age of 30.5.
In 2010, the World Bank reported that in most African countries, infrastructure is a major constraint to doing business, depressing firm productivity by approximately 40%. In over 50% of African countries, power is cited as a major business obstacle. To put this in perspective: the 48 countries of Sub-Saharan Africa, with a combined population of 800 million people, generate roughly the same amount of power as Spain, which has a population of 45 million people.
Compared to other continents, Africa is characterised by low overall population density, low rates of urbanisation, rapid rates of urban growth, a relatively large number of land-locked countries and numerous small economies. The cost of providing infrastructure in Africa is higher than anywhere else. Africa’s infrastructure deficit is not limited to electricity supply; it also suffers from major infrastructure deficit in respect of water supply and sanitation, irrigation, road networks and information and communications.
Africa’s growth improved remarkably in the first ten years of the new millennium with infrastructure contributing to almost half of Africa’s improved growth performance.
The 2017 Deloitte Construction Trends Report included 303 projects valued at US$50 million or above, with a total value of US$307 billion. The report states that, as a region, Southern Africa has the largest number of projects (93), while West Africa remains the region with the largest share of projects in terms of value.
The infrastructure projects cited in the report are spread between 38 of Africa’s 54 countries. South Africa is cited as the country with the most projects (44 projects), while Nigeria has the most projects by value (US$ 69.1 billion). The majority of projects fall within the transport sector (36%), followed by real estate (22.4%), energy and power (19.1%), and shipping and ports (7.9%). African governments make up the largest owners of infrastructure projects in Africa.
Recently, Africa has seen an increase in smaller value projects, valued between US$50 million and US$500 million range. This reflects the fact that true mega-projects are slow to implement and complex to construct and commission.
Stoffel recently attended the 8th International Society of Construction Law Conference in Chicago and sat on a panel discussing “Trends in Various Jurisdictions on Construction Law” with attorneys from Australia, Dubai, London, Paris and South Korea. This cutting-edge conference focuses on the global practice of construction law, including insights into the legal, business, and economic challenges and opportunities in construction today. The conference also sees the exchange of best practices from experts selected from all around the globe.
For more information, contact: firstname.lastname@example.org
The Society of Construction Law for Africa (SCLAfrica) is hosting its 2018 international conference in Johannesburg on 20 and 21 November. The SCLA brings together experts in construction law and dispute resolution from across the globe.
STBB is proud to announce that Stoffel Ackermann, head of its Construction Law Department, will be among this year’s speakers. He will be addressing attendees on African Construction: An Overview of the Latest Trends. He is a co-founder and Vice Chairman of the Society of Construction Law for Africa.
Stoffel’s presentation at the SCLAfrica conference comes on the back of his attending the 8th International Society of Construction Law Conference in Chicago, where he sat on a panel with attorneys from Australia, Dubai, London, Paris and South Korea.
The keynote speaker at this year SCLAfrica Conference is Sir Vivian Ramsey, a former judge of the High Court of England and Wales and a qualified civil engineer. He is a past winner of Construction Design’s Construction Silk of the Year and was the appointed judge to oversee the Technology and Construction Court in England in 2007. He was also appointed as a Fellow of the Royal Academy of Engineering in 2013.
If you would like to contact Stoffel, please email him at email@example.com or call him on +27 21 943 3800.
TOTAL OR PARTIAL DEMOLITION OF ILLEGAL CONSTRUCTION: SCA CAUSES CONFUSION
BSB International Link CC v Readam South Africa (Pty) Limited
Recently in Lester v Ndlambe Municipality and another, the Supreme Court of Appeal held that a court hearing an application in terms of section 21 of the Building Regulations and Building Standards Act had no discretion but to order demolition of a building constructed without the required building approval, ie it could not order partial demolition but was compelled to order total demolition. This was so, the court emphasized, because the law could not and did not countenance an ongoing illegality which was also a criminal offence, and to do so would subvert the doctrine of legality and undermine the rule of law. In April 2016, however, the SCA seemed to say something different.
ZONING: DOES ‘INFORMAL HOUSING’ CONSTITUTE ‘DWELLING HOUSES’?
Educated Risk Investments 165 (Pty) Ltd v Ekurhuleni Metropolitan Municipality (308/2015)  ZASCA 67 (20 May 2016)
The interests of a township developer and those of a local authority who uses a neighbouring (undeveloped) township for informal settlements, can be at odds, specifically in a society harshly divided along income lines. The Supreme Court of Appeal was asked to determine whether the informal housing constituted ‘dwelling houses’ as was prescribed by the relevant zoning scheme. It was also asked to address the question whether the local authority was obliged to comply with all the conditions of approval of the township or the sub-divisional conditions before permitting people to live there.
REDUCED RATES FOR HOA BECAUSE IT MAINTAINS ITS OWN INFRASTRUCTURE?
Blair Atholl Homeowners Association v The City of Tshwane Metropolitan Municipality (20634/2014)  ZASCA 195 (1 December 2015)
The Housing Consumers Protection Measures Act requires that home builders must be registered with the Council as a measure to ensure that consumers are protected from shoddy building work. Here, the Court confirmed that since the builder was not registered with the Council, it could not succeed in its application to make an arbitrator’s award that was granted in its favour an order of Court.
REZONING APPROVAL AND 2 YEAR LAPSING PERIOD
Langebaan Ratepayers & Residents Association v Berrydust 69 CC and Another (15849/2015)  ZAWCHC 183 (19 November 2015)
What triggers the lapsing of a rezoning in terms of section 16 of LUPO in circumstances where an appeal was lodged against the rezoning? Was it the date of the initial approval or the date of the MEC’s decision to dismiss the objection? The judgment provides a clear guideline how to address the position.
Demolish 5 of 9 Storeys
Aboobaker N.O and Others v Serengeti Rise Body Corporate and Another (12052/2014)
If a local authority and developer do not follow required notification procedures where a rezoning application is considered and subsequently building plans aligned to such rezoning are approved, property owners are not left without recourse, even if the building works had reached an advanced stage. The court here answered the affected owners’ call for review of the irregular decisions, in consequence of which it ordered demolition of the building work that was done subsequent to irregular municipal approvals.
Development Approvals Prior To Property Transfer
City of Cape Town Municipality Municipal Planning By-Law
In terms of the new planning laws effective in the City of Cape Town municipality from 1 July this year, the City can, on application, approve construction plans before the subdivision has been confirmed. Developers are at present however unable to submit any building plans prior to the confirmation, i.e. prior to the first unit in the subdivision being registered or transferred. The City is addressing the issue.
New Beginnings: SPLUMA and LUPA
Western Cape Land Use Planning Act of 2014 (link to be provided
The Spatial Planning and Land Use Management Act of 2013 (SPLUMA) and Western Cape Land Use Planning Act of 2014 (LUPA) both came into operation on 1 July 2015. From a development law point of view, what do these two pieces of legislation look like and how do they link up? In this first of a three-part series, we provide a short summary of SPLUMA. The next articles will provide details of the practical application processes flowing from the adoption of these laws.
A New Development Law Unit and Law Update
STBB’s Development Law Unit came into existence in April this year and this is the first of the Unit’s new monthly newsletter which will provide a snapshot of important news, cases and legislative happenings reported each month and which impacts on development law, property and conveyancing.
How will the Unit function?
Constitutionally Unfair to Disallow Temporary Transfer of Irrigation Water Use?
Does the Water Act allow the MEC to grant a temporary transfer of owner A’s right to irrigation water to owner B, for purposes of irrigation, where A and B reached agreement to this effect? And if not, does this infringe owner B’s constitutional rights? These were the issues tackled in this judgment.
Developer Selling Subdivided Township Land: Rates Clearance for Whole Mother ERF
After registering a general plan for establishing a new residential township, the developer applied for a municipal clearance to effect transfer of two of the subdivided erven that were subsequently sold. The municipality issued figures in respect of the whole mother erf, arguing that mere registration of a plan did not mean that the subdivided erven existed individually, as there was no change in ownership. This judgment illustrates the correct approach.
30 May 2013
EMPLOYEES OR INDEPENDENT CONTRACTORS?
In a highly regulated labour environment, the legal nature of any form of service relationship is paramount in clarifying the rights and obligations afforded to the parties in terms of statutory requirements. While an employee, under defined circumstances, is entitled to the protection of our labour law and the benefits it provides (such as vacation leave, sick leave, family responsibility leave, overtime and the right not to be unfairly dismissed), an independent contractor is not afforded such rights. It is therefore crucial to determine whether you are ‘an employee’ or an ‘independent contractor’.
FREQUENTLY ASKED QUESTIONS REGARDING WILLS AND DECEASED ESTATES
Uncertainties can arise when structuring a will. You may wonder, for example: What happens to assets bequeathed to children who live overseas? What if I die without having drafted a will? How are my maintenance obligations to a divorced spouse dealt with? In the next few paragraphs we answer some frequently encountered questions to assist you in your planning.