Durban - Conditions at Tong Lok - labelled Durban’s worst “bad building” - are again in the spotlight with fresh efforts to appoint an administrator to step into the shoes of its body corporate which, it is alleged, is not functioning at all.
There are concerns at a lack of running water, refuse not being collected and fouling the building, and a lack of basic maintenance.
The 15-unit building in Mahatma Gandhi Road was taken over by street children many years ago, and several owners seemed to have abandoned their homes.
But others are resisting a pending Durban High Court application and have hired an attorney to prepare opposing affidavits, which are presently being drafted.
The application has been brought by trustees of the BC Specialised Opportunities Fund Trust (formerly the Nexis Multi Strategy Fund Trust), which lent the body corporate almost R300 000 in November 2010 to pay what it owed the city in rates at that time.
Trustee Kevin Shames said the loan was never repaid, and the trust obtained default judgment against the body corporate in May last year, but demands for payment were ignored.
The trust now wants the court to appoint an administrator who would be given four years to try and turn the building’s finances around, failing which the building could be sold and the owners left with nothing.
If the order is granted, it would be the second time an administrator has taken control of the building.
The first court application was launched by the eThekwini Municipality in 2008, resulting in the appointment of Andre Grundler, which expired after three years.
He told The Mercury he believed the only solution would be to get a court order authorising the “deemed destruction” of the sectional title scheme, which would remove all owners’ rights and allow the building to be sold off at auction, the proceeds going to creditors.
At that time this had not been done in South Africa before, although the first application of its kind under the Sectional Title Act involving another Point building, Ark Royal, was in the pipeline and was eventually given the go-ahead.
Grundler said, however, that there was no money in the kitty at the time to initiate the application.
“Various attempts at a constructive resolution, including obtaining agreement from owners for relinquishing units to the body corporate in lieu of levy claims and voluntarily sale to interested purchasers, failed,” he said.
Grundler is supporting the trust’s application.
Shames, in his affidavit filed with the court, described the condition of the building as “dire”.
He said the city’s building inspectorate and health department had sent letters to the body corporate raising concerns about conditions.
“The body corporate is required to comply with any notice or order requiring repairs or work… no steps have been taken to do any repairs and no steps have been taken to repay the trust,” he said.
He said it also appeared that since the end of Grundler’s appointment, no levies had been collected.
“The body corporate is unable to pay its debts, but it is running up expenses while the building deteriorates, posing a major health hazard.
“Not only does it appear that the body corporate is being mismanaged, it looks as though it is not being managed at all.”
Shames proposed that a company called Tingaweb be appointed as administrator because it had access to finance from investors to fund debt collection and, if rehabilitation was not possible, to finance a court application for “deemed destruction”.
He said the administrator would need at least four years because legal action against owners, and evictions, would take time. The application also has the support of the municipality.
The city’s head of communications, Tozi Mthethwa, said the appointment of an administrator would be in the interests of the city.
The matter will be set down on the court roll once all the papers have been filed.
The Mercury