CAN ONE LOSE THE MONEY PAID FOR A LIFE RIGHT IN A RETIREMENT SCHEME?
Herold Gie and Broadhead Inc v Harris N O and Others (602/2023) [2024] ZASCA 125 (13 September 2024)
The Housing Development Schemes for Retired Persons Act goes a long way to protect purchasers of life rights in retirement schemes. Just how far the Act’s provisions shield purchasers was investigated in the Supreme Court of Appeal recently. The main issue was whether, on insolvency of the scheme’s developer, the purchasers could claim repayment of the purchase price from the developer’s attorneys, who had received the funds on behalf of their client initially – this despite having paid the funds to the developer upon conclusion of the transactions.
The judgment can be viewed here
Summary of the Judgment
SINS OF THE PREDECESSOR-IN-TITLE: NEW OWNER SADDLED WITH PENALTIES THAT AROSE WHEN SELLER FAILED TO BUILD WITHIN THE HOA’S STIPULATED TIME PERIOD
Bella Rosa Three Home Owners Association v Brandt and Others (A39/2023) [2024] ZAWCHC 267 (6 September 2024)
This dispute touches on a thorny issue: Owners who do not comply with the rules of a homeowners’ association requiring them to erect buildings within a certain time. These rules exist for valid reasons. However, can a new purchaser be saddled with a penalty levy immediately upon becoming owner because the period in which the building works had to be completed had already lapsed during the tenure of the previous owner?