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IOLProperty - South African Property For Sale
Monday Aug 13, 2012

Levy hikes see Mayville property owners homeless

Saddled with the cost of an interest bearing R3-million loan and levies, residents of 25 Bristow Crescent Mayville have no choice but to sell their homes.

Twenty-five of the 202 units have already been auctioned, and other families have had their furniture and household items attached to recoup levies from defaulting flat owners.

Clearly at the end of their tether, residents have written letters to the various authorities, including the national Minister of Human Settlements, Tokyo Sexwale, and Public Protector Thuli Madonsela's office, asking them to ascertain if there has been financial mismanagement.

They also met Human Settlements MEC Ravi Pillay on Tuesday.

Leonard Joseph, a spokesman for the residents, said the levies were unaffordable and that those who could not afford to pay were being charged interest on their arrears. This resulted in poor families, mostly pensioners, facing exorbitant bills, he said.

"We need to hold the Department of Human Settlements accountable. They need to explain why they didn't intervene when we informed them of suspected corruption at 25 Bristow," he said.

"Twenty-five families have already lost their homes and we know of many others who were forced to move out because of their arrears. There was a family who had to move into an informal settlement, and another is moving into a Wendy House," said Joseph.

Keith Walles, 62, said he had stopped paying his levies in October and owes thousands.

He said that he had to pay a special levy, an insolvency levy, a water meter levy, a loan levy and a painting levy, as well as the normal monthly levy of R672.50.

Walles and other residents who are in arrears, now owe between R60 000 and R254 000 each in unpaid levies, amounts they could not afford.

"They attached my assets so we have decided to sell the flat and move into a Wendy House," said Walles.

"But we are stuck here because the managing agent won't give us the financial statements."

Legal consultant Michael Hands who is representing the residents on a pro bono basis said that the conversion of the complex to that of a sectional title property seemed to have backfired.

Hands said that "the levies being imposed by the administrator are extremely high and beyond the economic reach of the occupants.

"Numerous units, the owners of which have been sued by the administrator for arrears levies, have been sold in execution of unpaid judgment for these levies, and a number of them have in this way fallen into the hands of people who neither live in the unit, nor allow family members to do so.

"They are obviously property investors and speculators," he said.

Managing agent Pravesh Suredin, of Unlimited Townhouses, whose task it is to collect payment from residents, said they had been managing the complex since it was placed under administration 10 years ago.

"The body corporate was badly managed when trustees were appointed by the owners. The Department of Housing stepped in and asked the high court to appoint an administrator," said Suredin.

However administrator Rodger Reinders said residents were already in arrears when he was appointed.

"When I took over in 2006, the body corporate owed the council R1.6m for rates, taxes and services. I then raised a loan of R3m to repay the council.
Since 2007 there have been repayments, but because of the non-payment of levies, I have been unable to keep up with the repayments. Over seven years, the amount on the original loan balance has increased due to interest and administrative charges on the loan.

"The body corporate in turn charged interest to those owners in arrears. The net effect is that the interest charged to the defaulting owners should cancel out the interest being paid on the loan. So there is no effect on the levies" said Reinders.

Pillay said the department was in the process of removing Reinders as the administrator.

She said they were concerned about his lack of full accountability in relation to financial management, especially the terms of the R3m loan, and the purpose for which it was used.

"In preparation for these legal proceedings, the legal department has been securing evidence to show support for such an application," she said.

Pillay said the department had fired a departmental official for corruption last year and other allegations were referred to the Special Investigations Unit.

Sunday Tribune

 
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