Uprooted in retirement

Overturns order that law firm repay retirees purchase monies to developer.

- Roy Cokayne, Moneyweb

RULING: SCA CASTS DOUBT ON PROTECTION OF LIFE RIGHTS BUYERS.

People who buy life rights in a retirement development might not have the level of protection they thought they had in the event that the developer of the scheme goes into liquidation.

This follows a Supreme Court of Appeal (SCA) judgment overturning part of a Western Cape High Court judgment that found that six purchasers of life rights in the St Leger Retirement Hotel in Muizenberg in Cape Town had a valid claim for the refund of the purchase price entrusted to a legal practitioner, where the practitioner had paid the entrusted amount to the developer prior to the insolvency.

The appeal was lodged by legal firm Herold Gie & Broadhead Inc (HGB) against a judgment in favour of retirees Richard Timothy Harris, Phyllis Mary Early, Oscar Walter and Alan Leaonard, Harvie Broadhurst, Annelisie Jansen Rensburg-Hattingh and van Michele Ann Wallis.

SCA Judge Nambitha Dambuza, with SCA judges Caroline Nicholls and Nolwazi Mabindla-Boqwana and acting SCA judges Ronel Tolmay and Nobulawo Mbhele concurring, said on payment of the purchase price, the purchasers took occupation of their units from June 2009 to November 2011.

In June and July 2009, the purchasers authorised HGB to pay to the developer the purchase price in respect of the life rights.

HGB released the funds to the developer.

However, in a letter dated 24 October, 2014, the purchasers cancelled their life rights agreements and demanded a refund of their purchase price.

The purchasers alleged that:

►They had not been furnished with the certificates of compliance contemplated under sections of both the HDSA and the National Building Regulations Standards Act; and