How servitude impacts property values

How servitude impacts property values

Private Property South Africa

When searching to purchase a property, most buyers are on high alert for any excuse to hackle down on price. Discovering that a property comes with a servitude often gives buyers exactly such an excuse.

According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, servitudes are not too prevalent in the suburbs but tend to appear more on farms or smallholdings. “A servitude allows for a third party, who is not the owner of the property, certain limited rights over the property. For example, a servitude might allow a person the right to travel over a portion of another person’s property in order that they might reach their own property. A servitude could also take the form of a municipal walkway between properties,” Goslett explains.

Essentially, what this means is that the owner of the property may exercise all their usual rights of ownership, provided it does not impede the rights of the servitude holder. Similarly, Goslett explains that the servitude holder may utilize the servitude but should do so in a way that causes the least possible inconvenience to the owner of the property.

Most servitudes will be passed over to the new owner of the land on which the servitude is held if the property is later sold. However, if it is a personal servitude, then the agreement only refers to one specific person and not to the land itself. In this case, the servitude is not transferred to the new owner and will fall away once the specified person relocates or passes on.

“The owner of the property on which the servitude is held is not required to get permission from the servitude holder before they sell, but the new owner of the property will be required to honour the servitude agreement. While servitudes may not be an issue for some buyers, others may still be deterred by it. This can reduce the demand for a property which in turn can have a negative impact on what asking price it can achieve,” says Goslett.

Buyers who would like to find out whether there is a servitude registered over a property can do so by either asking the seller, the agent or by examining the title deed. Those who own property with an existing servitude should be upfront with their chosen real estate professional and disclose this when it comes time to sell.

“An experienced real estate professional will know how to market the home correctly to attract buyers who would not be deterred by the servitude. It is never wise to hide the fact that the property comes with a servitude, as the truth will have to come up later in the transaction and is then likely to ruin the whole deal,” he concludes.

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