The country's apex court unanimously found that the Cape Town Community Housing Company (CTCHC) cancelling instalment sale agreements of 12 Wood Ridge residents to be unlawful.
The CTCHC was established through a joint agreement, including with the National Housing Finance Corporation, to provide affordable housing for poor residents.
The 12 families had moved into houses between 2000 and 2003, and discovered that the buildings were of an inferior quality, they argued.
The residents charged they had to spend substantial amounts of money, some up to R20000, to repair their new homes, and as a result they paid their instalments at different times and when they could afford it.
The Constitutional Court said the residents were threatened with the cancellation of the instrumental sale agreements if their instalments were not up to date and in 2014, CTCHC had sold their homes to S&N Trust.
The CTCHC had argued it was not an unsympathetic and irresponsible credit provider, but that it, prior to concluding the instalment agreements, implemented a comprehensive pre-purchase procedure to identify qualifying beneficiaries.
This meant prospective beneficiaries had to prove that they were able to pay the instalments through a savings scheme and that information “workshops” were presented.
“In passing, it is submitted that the evidence given by the applicants relating to alleged defects in the houses and poor treatment of them by the CTCHC is irrelevant for the purposes of this matter.
"It must however be pointed out that the applicants’ attempts at depicting the CTCHC as a reckless credit provider that provided substandard houses and that it has in general adopted an unsympathetic stance towards the purchasers, has been thoroughly and effectively debunked in the answering papers in the main application,” they argued.
Constitutional Court Judge Nonkosi Mhlantla said when CTCHC sold three houses to the trust it had not cancelled the instalment sale agreements, nor had it submitted an application to the Registrar of Deeds for the cancellation of the recording of the instalment sale agreements.
“(CTCHC) only submitted an application for the cancellation of the instalment sale agreements in April 2015.
"The Registrar of Deeds cancelled the recording of these agreements on May 4, 2015. On May 5, 2015, the properties were transferred to the trust.
“The effect of this is that the subsequent cancellation of the instalment sale agreements and the cancellation of the recording of these agreements are also invalid,” Judge Mhlantla found.
Resident Riaan Mogamat Amardien yesterday said he was happy the court had found in their favour, as the battle with CTCHC had carried on for 18 years.
“We never wanted free houses, we wanted a fair process.
"The houses were in a bad state, I had to fix burglar bars, windows, a leaking roof and paint the inside, as they did not do that. I spent about R20 000 fixing things.”
CTCHC chief operations officer Werner Jurgens said they were studying the judgment. “The company takes note of the judgment and is currently studying the content. The company intends to fully comply and adhere with the judgment.”