Shock waves for homeowners
The new electric fence regulations have created shock and confusion in the industry recently, and this is affecting unsuspecting homebuyers and sellers.
Due to the fact that the property industry has been slow to take notice of the electric fence regulations that came into effect on 1 October 2012, unsuspecting homebuyers should take steps to avoid being lumbered with the cost of having to pay for an Electric Fence Certificate (EFC) after registration or transfer of property into their names.
The new regulation means that electric fences erected after 1 December 2012 have to comply with the Electrical Security Installations Regulations (SANS 10222-3:2012).
If you had your electric fence installed after December 2012 by any person not registered, you have reason to be concerned. If the installation was done by a non-specialist company, then the chances are fairly slim that the installation has been undertaken to legislative specification.
From December 2012, all new, upgraded and repaired electric fence installations in South Africa must be compliant and the government has now established strict new regulations for this industry.
All electric fence installers must be registered after first passing a tough exam. The new law says that electric fences must now be certified with an Electric Fence System Certificate of Compliance (EFC). This certificate is similar to the Electrical Compliance Certificate that all property owners must have.
However, electricians cannot issue this electric fence certification – unless the electrician is also qualified in terms of the new electric fence laws and has been registered with the Department of Labour.
It is important to ask a contractor who will work on a current fence or new fence to show you his certification from the Department of Labour.
In terms of this new law, all properties with an electric fence erected after December 2012 can only be transferred if an EFC has been lodged.
Any electric fence that was erected prior to 1 December 2012 does not need an EFC until the time comes to sell the property.
The sellers are then required to get an EFC, which states that the electric fence is in good working order and cannot be easily touched by accident and that the installation complied with the legislation at the time the electric fence was installed.
So what should you do if you are about to buy a new property that has an electric fence?
Denoon Sampson of conveyancing attorneys Denoon Sampson Ndlovu Inc shares his expert advice. “As most sale agreements still omit the requirement of an electric fence certificate, property buyers could find themselves in for a rude shock. As most of the preprinted Offer to Purchase/Sale agreements still omit the requirement of an Electric Fence System Certificate of Compliance, you should take great care,” he says.
Sampson says purchasers who buy privately, without the benefit of an established estate agent’s pre-printed offer to purchase document, should take careful note, as generally, there is no estate agent nor attorney involved in the negotiations, to safeguard their interests.
We look at a situation where the sale agreement makes no mention of any Fence Certificate and highlight the consequences of there being no agreement between the seller and purchaser concerning electric fences that were installed before 1 December 2012:
The key legal elements of the Electrical Machinery Regulations, published in Government Gazette No 34154 dated 25 March 2011, are as follows:
1. There is no obligation on the owner to obtain a Fence Certificate, if the electric fence was in existence prior to 1 December 2012; hereinafter referred to as the ‘old fence’.
2. Regulation 12 does not prohibit a property transfer if there is no Fence Certificate; - in the case of old fences.
3. If the sale agreement is silent on the issue of a Fence Certificate, there is no duty and no requirement that the seller provides it before transfer; nor even after the property transfer.
4. Regulation 12 (5)(b) states that if there is a change of ownership of the premises, the user or lessor shall obtain an electric Fence Certificate.
5. A fence installed after 1 October 2012 must have a Fence Certificate, which will last for two years and is transferable within the two-year period.
Accordingly, we may conclude that only a registration of transfer of the property (being the required change of ownership) is the trigger for the user to be in possession of a Fence Certificate.
Who is the user on or after transfer?
A user is defined in the legislation as being the person in control of the premises. Almost invariably upon or after registration of transfer, the purchaser will be the person in control and of course is the person most likely to be the user. Therefore, the purchaser suddenly becomes liable to obtain the Fence Certificate.
In essence then, the seller will never have to provide a Fence Certificate if the fence was in existence before 1 October 2012.
So how can this be, one may ask? We are all familiar with the requirement that the transferor/owner produces an Electrical Certificate of Compliance (ECC) before transfer.
The ECC Regulations are entirely separate from the Fence Certificate Regulations and neither cover nor include the other.
In simple terms, the ECC Regulations are the opposite of the more recent Fence Regulations because ECC Regulation 7 actually stipulates that the “user or lessor may not allow a change of ownership, if the certificate of compliance is older than two years”.
The first shock then is that the purchaser has no basis to call on the seller to provide a Fence Certificate as the seller has no obligation to produce one. Don’t forget we are only referring to old fences.
The second shock is when the purchaser is subsequently told by the contractor that the fence is defective and must be upgraded at significant cost to the purchaser. Only then the purchaser realises that he has no right of recourse against the seller.
In conclusion, prospective purchasers should be aware that they cannot expect that a Fence Certificate will be automatically provided if they sign an Offer to Purchase that makes no mention of any electric fence.
They should analyse the draft agreement and insert a clause that the seller arranges and pays for a Fence Certificate before lodgement.
Sellers, on the other hand, should realise that in respect of an old fence, they have no obligation to obtain and provide any Fence Certificate, even after transfer. It is their right not to provide a Fence Certificate as implied by the regulations that are published in the Government Gazette.
We can foresee detailed and complicated negotiations about who will ultimately pay, not only for the Fence Certificate, but also who will pay for the fence to be upgraded as in most cases sellers will say they have no pre-existing obligation to upgrade the fence just because they have now sold the property. Remember voetstoots is always in the background and the property is always sold ‘as is’.
So, at the end of the day, purchasers can avoid a double electric fence shock by negotiating with the seller before the Offer to Purchase is signed.
Unless the property industry redrafts all its pre-printed Offers to Purchase documents and inserts clauses about who should pay and provide Fence Certificates, and unless the regulations are updated to fall in line with the ECC regulations, the fairest solution is for buyers and sellers to each contribute half of the total cost of obtaining the Fence Certificate, which will be required after transfer.