Cape Town - Subsidy houses, formerly known as RDP houses, are being sold illegally for cash on classified sites such as OLX or Gumtree, leaving the beneficiaries to return to informal settlements or the street.
Often the properties are sold below market value with no guarantee that the buyers will get the title deed they need to be the legal owners.
While formal statistics are scant, the Western Cape’s human settlements department says the illegal sale of RDP housing is widespread, and difficult to prevent.
In Dunoon, for example, only four out of 10 RDP houses are occupied by the original beneficiaries.
The national Department of Human Settlements said it was illegal for the recipient of an RDP house, now known as a Breaking New Ground house, to sell it before having lived in the structure for at least eight years.
“We are of the view that RDP houses must never be sold,” said ministerial spokesman Ndivhuwo Mabaya. “They must be improved and handed over from generation to generation. Our research is that these houses are sold to satisfy short-term interest and for financial relief. This is a problem, as the (seller) either returns to informal settlements or becomes a street citizen.”
During the eight years the beneficiary may only sell the property back to the provincial human settlements department.
Most of the time the house is sold at a price that covers the debt owed, not a price that reflects the full value of the property.
The national department said subsequent buyers usually would not qualify for state housing subsidies.
Mabaya said many of the property sales were illegal, with the sellers returning to informal settlements to “instigate protests and violence at times against the people they have sold houses to”.
They were being sold to “anyone who has money”.
The Cape Argus contacted someone who was advertising several RDP properties on OLX. In WhatsApp correspondence about the advertised property, he insisted the transaction had to be cash only. Subsidies would not be accepted.
A quick search on other online classified websites showed he was selling several properties, ranging from R100 000 to almost R200 000. In some cases he specified that the houses were more than 10 years old.
Bonginkosi Madikizela, Western Cape MEC for Human Settlements, said the resale of subsidy houses was almost impossible to prevent.
“We can have as many laws as we want but this is difficult to prevent. We are giving houses to people who have nothing to put on the table. A house is not a substitute for a job. That is why people end up selling or renting their house.”
Madikizela said the eight-year restriction, or pre-emptive clause, was forcing people to sell their houses illegally or informally. This often meant the new buyers would not get title deeds or proper transfer of the property. Sales on the informal market were “impossible to police”.
In response to a parliamentary question last August, Human Settlements Minister Lindiwe Sisulu said there were no protocols to track the unlawful sale of subsidised houses. However, there was a record of cases reported to the respective provincial housing departments where the eight-year restriction had been waived.
Sisulu said the Western Cape government waived the eight-year pre-emptive right for 151 houses in the 2011-12 financial year, allowing the house to be sold after the beneficiary had lived there for two years.
In 2012-13, 389 houses were sold after only two years – 112 in the Eastern Cape, two in Limpopo and 275 in the Western Cape. The number increased to 2 852 in 2013-14, with most in the Eastern Cape. The Western Cape allowed for the sale of 154 houses after two years during this period.
Sisulu said the Eastern Cape provincial housing department reported the illegal sale of 112 houses in 2012, and 2 697 the following year.
Madikizela said the problem was widespread in the Western Cape. A recent study in Thembalethu, George revealed that out of 10 RDP houses, only one occupant was the original beneficiary. A study in Dunoon revealed only 40 percent of the RDP tenants were the original beneficiaries.
Many of the houses were being used as spaza shops.
Sisulu said in August last year the national department would conduct an occupancy audit of government houses.
“We have started auditing our waiting list in order to create the demand database to strengthen our allocation policies, to ensure that those who have benefited do not move to another municipality and benefit again,” said Mabaya.
An education campaign is to be launched next month, cautioning beneficiaries about the risks of selling their houses.
Mayoral committee member for human settlements Benedicta Van Minnen said the city dedicated “significant resources” to educating beneficiaries in financial management, basic legal advice, general home maintenance and repairs, and establishing food gardens to increase food security.
R165 000 cash, and three days later house is yours
At least seven RDP houses are listed “For Sale” on popular online advertising websites.
On Thursday a Cape Argus reporter, posing as a potential home buyer, met a man claiming to be a property developer who promised to have “the perfect house to sell”.
The man works for a company which advertises property on OLX and Gumtree.
He said he had properties in Khayelitsha, Eerste River, two in Happy Valley in Blackheath, two in Wesbank and one in Kuils River. The houses in Khayelitsha, Eerste River, Wesbank and Blackheath were RDP houses.
In an arranged house viewing visit to the house in Happy Valley, which was listed on sale for R165 000 cash, he warned about the condition of the house. “It’s not an ideal house unless you are looking into developing it and selling it later or renting it out.”
He attempted to persuade us to view the house in Eerste River, which he said was worth R400 000. “We are selling it for R200 000,” he quickly assured us.
The house in Happy Valley was semi-attached with barbed-wire fencing and two big trees in the front.
He told us: “I am a property developer. Normally a client approaches us to develop and then sell the property. But this particular client did not have money to develop the house – she just wants to sell it.”
He said the owner had a title deed and the company had received a document from the Human Settlements Department approving the sale of the house.
After viewing the house from the outside, we found that the home owner was in. The woman, who appeared to be in her fifties, said she was no longer living in the house and was renting it out.
She said she was tired of living in the area and wanted to get rid of it.
The house had one bedroom. It was empty inside except for a council rubbish bin. The ceiling needed a touch-up and the house needed repainting.
The owner left us with agent and did not take part in our talks. “The house is R165 000 – cash not subsidy,” he said. “That amount includes our transfer fees and client fees. Our lawyer takes care of the transfer.”
Once the amount was deposited into their account, the lawyer began processing the sale. “Our client moves out immediately the money is in her account and we give you a proof of transfer while the council is still processing it.
“Our lawyers and the department work very fast, it could be up to three days – but the council delays the process.”
He assured us that this was not the first time he had sold a house.
“If you guys sort your finances out I assure you, you can have the house, no hassles.”
Cape Argus