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Buyers of overhyped land could end up with a dud if they don't check the facts
 
Leafy Irene, outside Pretoria, is the setting for a fast-unfolding battle between conservationists and developers. It was sparked last week by the auction of what was advertised as 32 ha of "blue-chip developable" land.

Conservationists argue that the land will never support development and that the seller was misleading potential buyers with its advertising. It's a reminder for buyers of land to check their facts before purchasing.

Located in Doornkloof, Irene, the land is part of a deceased estate in the Smuts family, descendants of the former SA prime minister, Jan Smuts. It was sold for R7m by Auction Alliance to an unnamed buyer, probably a developer.

Bob Dehning of the Gauteng Conservancy Association is up in arms. He says the advertising was grossly misleading and "inflated the perceived real estate value of the property".

He agues it's extremely unlikely any developer will get change of use or development approval, adding that the area is dolomitic, ecologically sensitive and not suitable for development.

"Past experience shows that if a developer buys land and approval is refused, he will act to the detriment of the area and neighbouring properties," says Dehning.

His concern is for the Smuts Farm Conservancy, which lies adjacent to the land that was sold. And he has lodged a formal complaint with the Advertising Standards Authority.

The MD of Auction Alliance's KwaZulu Natal office, Hein Hattingh, who handled the auction, counters that the land is zoned for agricultural use and that no specific geotechnical study has been undertaken.

"One of our conditions of sale, stated before the auction started, was that the sale was voetstoots," he explains. He argues that experienced developers don't buy blind. "We haven't guaranteed any specific development opportunities."

Nevertheless, the ad did seductively state: "This property boasts enormous potential for residential development."

Hattingh says environmental campaigners were out in force at the sale and vociferously advised bidders of their fears and issues. "This, despite there being no hard facts to substantiate their claims," he adds.

The question is: who is responsible for checking the facts?

Auctioneers of land and property fall under the Estate Agency Affairs Act and are bound by the Estate Agency Affairs Board code of ethics, says board chairman Linda Nyembe. These include the duty to disclose facts about the land or property, and the undertaking not to make false statements or use harmful marketing techniques.

"Puffery is one thing," says Nyembe. "Falsehood is another."

So if the ad claimed the land was developable, the auctioneer must have checked that fact. "Then again, developable' could refer to the building of a single dwelling," says Nyembe.

The bottom line is that buyers need to be savvy and to do their homework. "A lot of people would like to see restrictions placed on these sorts of hyped-up development proposals," says Dehning.

Financial Mail