Municipality loses battle over developer’s R48M housing development claim

And 10 years later, interest keeps running
The Mhlontlo Municipality recently lost a vital case in its fight against a R48m damages claim by TDH Tsolo Junction. The latter sought to develop a large housing project at Tsolo Junction just outside the town of Tsolo.  For this purpose, an agreement was concluded regarding the detail of how the project would be carried out.

The Mhlontlo Municipality recently lost a vital case in its fight against a R48m damages claim by TDH Tsolo Junction. The latter sought to develop a large housing project at Tsolo Junction just outside the town of Tsolo. For this purpose, an agreement was concluded regarding the detail of how the project would be carried out.

The project stalled in 2010 because the municipality had failed to meet its part of the agreement with regard to the provision of bulk services. Despite notifying the Municipality in writing in March 2010 of its breach of the agreement and giving it 30 days to remedy the breach, the municipality had stood fast in its refusal to provide the bulk services required. The developer was accordingly forced to cancel the agreement in December 2010. As a result, it suffered damages to the tune of some R48m.

This is one of a number of matters where developers and municipalities clash. Now almost 10 years have elapsed since the cancellation of the agreement, with damages  continuously increasing. Attorneys adept in facilitating resolution of disputes, on both sides, can go a long way to avoid years of litigation, wasted costs and wasted development opportunity. As soon as your development hits snags, take time to consider whom to involve in your legal team.

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