28 August 2008 by

Phasing of townships

The Town-planning and Townships Ordinance, 15 of 1986 (Transvaal) allows a township applicant to apply for a division of an approved township, before the township register is opened.

The township applicant is thus able to apply for approval to establish a township, obtain approval in principle and then phase the township. The effect of the phasing or division of a township is that each phase is treated as a separate township.

There are several benefits for the township applicant arising from the phasing of a township: Interest charges on borrowed funds and the initial capital outlay are reduced; the proceeds derived from the development of the first phase could be used to fund the second phase; the assessment rates and taxes payable to the relevant municipality in respect of the un-proclaimed phases are minimal in comparison to assessment rates and taxes payable in respect of a proclaimed township; and the township applicant is able to open the township registers and proclaim the phases as townships as and when the market dictates.

The phasing of townships does not always offer sufficient flexibility. A material amendment to the layout of the township will be considered as a new township application. Furthermore, the City of Johannesburg Metropolitan Municipality (COJ) will not allow the shifting or distribution of approved rights over common boundaries of townships.

In the past, a township applicant not using all the available bulk in a township or a phase could enter into a notarial tie agreement with the COJ in terms of which two townships were notarially tied. The result of the notarial tie agreement was that the underutilised bulk in one township could be used in the second township. The COJ will no longer enter into a notarial tie agreement with an owner of properties if the notarial tie agreement will result in the spreading or shifting of bulk.

A township applicant, who wishes to increase the applicable bulk of erven in a township, must submit a rezoning application. Apart from the rezoning application being time consuming and costly, there is always the risk that a third party could object.

It is important to consider these factors in the planning stages of a township.

Lucia Erasmus, director, Cliffe Dekker Inc

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