Lodgement of Spluma Certificates, no longer a registration requirement in the jurisdictional areas of Govan Mbeki and Emalahleni to take transfer of an immovable property.

Introduction

I find it exciting when the common law is developed in our Constitutional Court, as their judgments enhance contract drafting and assist society to understand the law better.

The most recent judgment on SPLUMA Certificates caught my attention.

A SPLUMA Certificate is an approval issued by the Municipality confirming that a building on a property is legitimate and complies with zoning regulations.

On November 19, 2024, in the Constitutional Court, Chaskalson AJ, Mathopo J, Mhlantla J, Schippers AJ, and Tshiqi J delivered a brilliant majority decision in the Govan Mbeki and Emalahleni Local Municipalities matter. The second and third judgments are equally well-presented, but the majority ruling will change bylaw legislation and its application.

As I read this judgment, I realized that the legislator has provided municipalities with significant power to govern communities and create functional spaces for the people.

This is why leadership in municipal councils should be skilful, value communities, and understand the challenges within them.

What is the decision about?

Sections 155 and 156 of the Constitution empower municipalities with executive authority and the right to administer matters listed in Part B of Schedules 4 and 5 and to make bylaws to administer those matters. Schedule 4 of Part B includes the governance of building regulations and municipal planning issues.

Transferring attorneys in the jurisdictional areas of Govan Mbeki and Emalahleni Local Municipalities had to lodge a SPLUMA Certificate with the usual transfer documents for examination by the deeds office.

This SPLUMA Certificate, introduced by the municipalities, went beyond the standard clearance certificate confirming that all rates and taxes were paid. It also required proof that past penalties levied against the property were paid, the land use and buildings complied with the land use scheme, common areas were transferred, services were installed to the municipality’s satisfaction, and all approval conditions were met.

The arguments for and against the SPLUMA Certificate

The Respondents’ Arguments (“The People”):

• The bylaws went too far, irrationally depriving them of the right to property.
• That municipalities overstepped their powers beyond what is envisaged under the Constitution, SPLUMA legislation, and the Systems Act.
• That municipalities unnecessarily involved themselves in land transfers and extended their powers beyond municipal planning issues.

 The Municipalities’ Arguments:

• That the Constitution and SPLUMA legislation empower them to ensure compliance with municipal planning requirements.
• They argued that it is costly to enforce the bylaws, and that the limitation applied was not illogical.

The Court’s take on the application of the law

The Majority Judgment:

• Bylaws conflicting with national or provincial legislation are invalid.
• Local governments cannot assume powers unless granted by national or provincial authorities.
• The Registrar of Deeds determines whether a property can be transferred.
• Municipalities have enforcement mechanisms, including compliance notices, demolition orders, property inspections, and court interdicts.
• The argument that inspections are too costly was not supported by evidence.
• The municipalities are asking for their powers to be replaced with a system where property owners and the Registrar of Deeds enforce the planning requirements. However, this is an “unlawful abdication of executive obligations imposed on the municipalities.” Municipalities don’t have discretion; the power has been delegated to them, and they must apply their powers.
• Transfer restrictions cannot apply universally to all transactions once developed land has been transferred.
• Bylaws must align with the Constitution.

 The second judgment:

• Dodson AJ, with Kollapen J concurring, supported transfer limitations and that the creation of bylaws force compliance. Where powers are basically the same and overlap, each sphere functions on its own but all work together.
• Transfer limitations are for safety and good social purposes.
• To establish whether the reason for a limitation is good enough, you will identify the problem, examine the purpose of the limitation and how it affects others, and ask in-depth questions. The process to limit a right must also be examined. We live in a society where nobody has absolute ownership.
• “The embargo places the transferor in a ‘squeeze’” and forces corrective action and compliance with the bylaws.
• It’s the municipality’s duty to ensure that developers comply with municipal conditions, not end purchasers.

The third judgment:

• Rogers J supported transfer embargoes but only for developers, not individual buyers.

 Conclusion

I believe this decision goes far beyond just dealing with SPLUMA Certificates. It means we need to interpret bylaws against the South African Constitution, scrutinize the enforcement of bylaws and building regulations by homeowner associations and assess how they apply the law.

Written by Michelle Horn (2024) and edited by Erusha Reddy (2025) .