Developers fight estate ‘hijacking’

A resident smashes the window of a furniture removal van, during an eviction in December 2011 from Valley View estates in Durban.

A resident smashes the window of a furniture removal van, during an eviction in December 2011 from Valley View estates in Durban.

Published Mar 29, 2012

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The developers of a R75-million quality low-income housing estate in Durban have gone to court seeking the eviction of hundreds of its residents, claiming they hijacked most of the 330 two-bedroom units, turning the estate into a lawless no-go zone.

Sohco Property Investments, a not-for-gain company which has developed housing in Durban, Cape Town and in the Eastern Cape, says it has been under siege from rent defaulters in all three of its projects in Durban in an organised rent boycott aimed at financially ruining it.

In 2011 the developers got an urgent interdict against some residents of River View in Cato Manor who it claimed, were knocking down walls to create “Julius Malema super-units”, chasing lawful tenants out of the building and demanding they hand over their rent to them.

But the residents say they have a legitimate rental dispute with the company and it is “muddying the case” with the allegations of a take-over by gangsters and thugs.

“If they are true, then they must lay criminal charges against those responsible. But nobody has been charged,” said residents committee member Njabulo Nxumalo.

Sohco’s CEO Heather Maxwell told The Mercury on Wednesday that “criminal actions are under police investigation”.

Sohco has spent the past few years in court fighting to recover what it says it is owed in rentals and attempting to evict those who are not paying.

It has issued hundreds of summonses from the magistrate’s court.

The legal battle at another development in Hillary, Valley View, reached the Constitutional Court where an attempt by residents to appeal against their eviction, was thrown out.

And there is also an eviction application against about 90 residents at Port View in Albert Park.

The River View case, for the eviction of 230 residents, was launched in the Durban High Court two years ago and was set down to be argued this week. But the residents’ lawyer withdrew and they now have until April 17 to find a new one.

In an affidavit before Judge Rishi Seegobin, Sohco’s Stuart Talbot said the company’s primary purpose was to develop quality, affordable residential property for people earning between R2 500 and R7 500 a month.

Funding came from the national Department of Housing in the form of an institutional subsidy.

Talbot said while the units were all the same size, higher income earners paid more because cross-subsidisation was crucial to the model succeeding and was mandated by national social housing policy.

“Applicants are screened and allocated accommodation in the scheme on a grid or matrix, ensuring that there are sufficient tenants in various income groups to provide the cross-subsidisation necessary to ensure the project is economically viable.”

Some were paying R750 a month while others were paying R2 600, he said.

While Talbot claims each tenant was informed of their rental before moving in, residents now claim the amount had been left blank on the leases they signed.

Talbot said the organised rent boycott began in 2010 with about 75 percent of residents not paying “a deliberate strategy to force us to reduce their rental”.

At the time of making the affidavit, the company was owed almost R10m by the tenants of all three projects.

“It may be their strategy to force us into liquidation so they can stay there free of charge for an extended period, if not indefinitely,” Talbot said.

He said Valley View had become a no-go area for company employees and agents and in 2011 there had been a violent protest, with barricades and burning tyres.

Nxumalo, in his response, claims the company is running at a profit because it also receives individual subsidies from local government which it is pocketing, and then charging tenants a full market-related rental.

He says prospective tenants were told they would pay rentals of between R800 and R1 500 but these would be covered or reduced by the local government subsidy.

“We are not in arrears because the subsidy should cover the outstanding rentals,” he said.

Talbot denied all these allegations “with contempt”.

In a press statement, Maxwell said the Durban development had been funded partially through subsidy (about 45 percent) with the balance coming from mortgage bond finance.

This, management and maintenance costs, needed to be covered through rentals collected.

She said the “hijacking” had involved small groups of tenants working with people outside the developments.

In the Valley View case, about half of the tenants had continued to pay rent in spite of “extreme intimidation” and that development was now stable.

At Port View, about half of those facing eviction had made arrangements to pay arrears “which if they honour will result in eviction actions being withdrawn”.

The Mercury

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