Life rights for senior citizens in retirement villages: A checklist for attorneys

RETIREMENT VILLAGE

Life rights for senior citizens in retirement villages: A checklist for attorneys

WARNING: This does not constitute legal advice. You are however  strongly advised to seek legal advice on this topic of retirement villages. It is complicated matter.

General Introduction

The laws applicable to entitlement in respect of immovable property has seen dramatic changes brought about by modern society. Retirement villages (RVs) are being built in every province and retired people buy into these RVs – some to their financial detriment while others are completely satisfied. Some 24 years ago the Housing Development Schemes for Retired Persons Act 65 of 1988 (the Act) was promulgated. The main purpose of the Act is to regulate the RV industry.

Retired persons should look out for a RV that will suit their special needs best. Some RVs provide medical care, high security and related facilities and some cater specifically for the elderly who are debilitated.

Retired persons want a safe haven that will care for them in their old age while they can live relatively independently. Such a person is prepared to buy ‘life rights’ in a RV. It is referred to in the Act as a ‘housing interest’, which is available exclusively to those who are 50 years or older. ‘Life rights’ and ‘housing interests’ should be treated as different names of the same thing.

This section of the commercial sector in South Africa is heavily regulated by about 20 statutes, regulations, municipal by­laws and charters applicable to the elderly. This article will only describe in concise terms the applicability of the Act.

There were some drastic changes and new additions to the statutory laws in the past 24 years. The Act has been amended three times and the regulations were amended once. The Aged Persons Act 81 of 1967 (interlinked with the Act) has been repealed in its entirety and was replaced by the Older Persons Act 13 of 2006 and regulations.

The documentation of any home for the aged in operation and registered prior to 1 April 2010 should therefore be inspected closely to bring it in line with the requirements of the Older Persons Act and its regulations.

A housing scheme for retired persons should not be confused with a development scheme in terms of the Sectional Titles Act 95 of 1986 or a share block scheme in terms of the Share Blocks Control Act 59 of 1980.

A retired person is someone who is 50 years or older. In other statutes, such as the Older Persons Act, the threshold is 65 years or older for males and 60 years or older for females.

These life rights are normally sold the first time by the developer or by estate agents. A person who sells a housing interest for the first time is also a developer.

The agreement should be in writing (s 2)

It is obligatory that the agreement be reduced to writing and signed by all the parties. If the contract is signed by agents, the agent’s authority should be in writing. The law pertaining to contracts entered into by trusts and/or companies to be formed is intact and should be followed implicitly (s 2).

If a client has not signed a written agreement, regard should be had to s 8(2), which might come to the rescue of a seemingly hopeless situation.

Checklist for the contents of the contract (s 4)

Section 4 prescribes the contents of the agreement.

Below is a checklist based on s 4:

• The names of the purchaser and the seller and their residential or business addresses.

• What is the legal basis for the housing interest?

• How long will the person have the right of occupation?

• Is the housing interest registerable?

• Has the title deed been endorsed that it is subject to a housing development scheme?

• Is the property described properly? In what magisterial district is it located?

• Is the seller the registered owner? If not, who is?

• If someone else is the owner, more information is required, for instance, on what basis does the seller sell the life rights? The contact details of the owner should be available.

• Is the land subject to a mortgage bond? If it is, how much is outstanding? How much of the purchase price will be used by the seller to repay the mortgage bond?

• How much will the life rights cost?

• What is the amount of interest payable annually? What is the rate?

• If payable in instalments, how are the instalments calculated?

• When are these instalments due?

• Have you received a certificate issued by the architect or quantity surveyor that the RV was erected in accordance with the approved plans? If not, when will it be received?

• If there are house rules, where are these kept and when can they be inspected? What kind of services or facilities do you buy? Are there nursing care and frail care available? Are these services and facilities available to you? Is the RV mainly for debilitated people?

• What official language do you want the contract to be in?

• When will you be able to move in and when will the risk pass?

• Whose responsibility is it to take out insurance?

• Is there an amount payable as endowment, betterment or enhancement levy, a development contribution or anything similar? If yes, to whom and how much is outstanding?

• Who will pay for the contract and the transfer of the life right?

• If the seller is the owner of the land, he or she should assure you that he or she will not take out a further mortgage bond.

• If you are entitled to have the land transferred to you, when and how much will you have to pay? Who will attend to the transfer?

• You should be given an estimate for the next three years what the expenditure for the control, management and administration of the RV and all the services and facilities will be. It must also be clear who will be liable to pay it and assurance must be given that you will not be billed for it over and above your monthly levy.

• The levy should be clearly spelled out for at least two years in advance.

• If you have not received the architect’s or quantity surveyor’s certificate, you may cancel the agreement and institute a claim, or you may abide by the agreement and not pay any interest.

• Exactly how many life rights are there in the housing development scheme?

• The management structure or proposed management structure should be spelt out.

• The regulations can prescribe anything else that should be included into the contract.

The title deeds should be endorsed (s 4C).

The title deeds of the property should be endorsed that it is subject to a housing development scheme, failing which a person may be fined R20 000 (maximum) or alternatively sentenced to five years’ imprisonment.

Endorsements are prescribed by the regulations relating to the Endorsement of Title Deeds published 31 August 1990. Any developer may request the registrar to endorse the title deeds, even if it is not necessary to have them endorsed.

If the housing interest is sold for the first time (s 6)

If a housing interest is sold for the first time, the developer should give the purchaser the following three documents:

• A certificate by an architect or quantity surveyor that the housing scheme has been erected substantially in accordance with the approved building plans and not in contravention of any by­laws. This certificate should also state that the building is sufficiently completed for the purposes of the scheme.

• The purchase agreement that complies with section 4 of the Act.

• A certificate that the title deeds to the land have been endorsed to the effect that the property is subject to the housing development scheme.

A developer may not receive any consideration or any part of it, without giving these three documents to the purchaser. If he or she does, and he or she is subsequently found guilty for being in default, in a criminal trial he or she may be fined R20 000 or alternatively be sentenced to five years’ imprisonment.

The deposit may, however, be paid into the trust account of an attorney or an estate agent. If the deposit is paid to the developer, he or she should give the purchaser an irrevocable guarantee issued by a financial institution that the money will be paid back to him or her if the developer fails to perform in terms of the agreement. However, if the developer becomes insolvent, then the money paid becomes immediately due and payable to the purchaser.

RVs exclusively for retired persons (s 7)

The right to occupy this property is reserved exclusively for the retired person or spouse and nobody else. All the owners may grant written consent to someone else than a retired person to occupy the land. Contravention hereof is an offence and liable on conviction with a fine of maximum R1 000 or six months’ imprisonment.

You should therefor differentiate between ownership and the right to occupy the property. In essence it means that a person younger than 50 years of age may be the registered owner of that specific property, but is excluded from living there until he/she attains the age of 50.

Consequences of contracts that are void or cancelled (s 8)

There are various consequences that flow from contracts that are void or cancelled.

Section 8(1) is very involved and should be read with great care.

Consequences of defective contracts (s 8(2))

It is quite clear that a contract should be in writing and signed by the parties, failing which it is of no force or effect.

Section 2(1) is unequivocal about this; it is, however, subject to s 8(2).

The legislature made provision for those occasions where there is no written contract. If a purchaser has made full payment and the land has been transferred to him or her, then this alienation is valid from the beginning. The same applies to a housing interest that has been transferred.

Relief the court may grant (s 9)

This section assists the purchaser first and foremost and sets out the relief a court may grant in respect of disputed contracts.

If a contract does not comply substantially with s 3 (the language the contract has been written in) or s 4 (the contents of the contract), the purchaser has a claim. If the seller has failed to comply with any obligation of the contract or has contravened any provision of a regulation and the purchaser has suffered any prejudice, then litigation might ensue. It is extremely wide and may be abused by purchasers who are at loggerheads with sellers or developers.

The court retains its wide discretionary powers supplemented by s 9. A court may –

• in addition, reduce the interest rate applicable if it is just and equitable;

• order rectification of the contract; or

• declare it void ab initio; or

• grant alternative relief.

The regulations

If a housing development scheme is erected in terms of the Act then these regulations are applicable.

If it is developed in terms of the Sectional Titles Act or as a share block scheme in terms of the Share Blocks Control Act, then regulations 7 to 14 are not applicable.

Definitions such as ‘accommodation’, ‘common property’, ‘facilities and services’, ‘housing development scheme’, ‘the managing agent and the managing agreement’ should be looked at carefully.

The developer is under compulsion of the law to have a host of prescribed documents ready to give to an intended purchaser. It is safe to state that the contents of most of these documents were already alluded to in the discussion above about the contents of the contract (s 4).

The penalty for non­compliance is R 6 000 or 3 years’ imprisonment.

Conclusion

The Act is not perfect.

It is an attempt to regulate the market and to protect a retired person. These housing schemes are very popular and in high demand. If the contract complies substantially with the law as stated above, it might be assumed, all other things being equal, that it is relatively safe to enter into such a contract. If a developer is diligent, he or she should consult a lawyer before embarking on such a development scheme.

This article was first published in our Attorney's magazine DE REBUS 2013. DE REBUS granted me permission to publish it on my blog and I do acknowledge their consent herewith: Thank you. 

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A NEW DIRECTION FOR MY BLOGPOSTS

 A NEW DIRECTION FOR MY BLOG WRITE-UPS

Where to from here with my blog write-ups?

Am I still on track with my chosen path to follow Christ Jesus in my daily life? Am I still pursuing a renewed mind every day of my life? Or had I somewhere gone off track?

I think I have gone somewhat astray in how I conduct the direction of my BlogSpot. It is a kind of national sporting event in the circles where I found myself in, to trash my country the Republic of South Africa. It is easy to join the fray by telling these horrible stories of our country going down the tubes very fast and how everyone is misbehaving. Crime is rampant. There is almost no work ethic amongst not only governmental employees but it impacts the civil workforce as well. I am sure that you can fill in the gaps and expand this list – don’t do that.

I am sure that there is an answer to most of our problems to be found in the Christian ethic in the broadest sense possible. It is somewhat akin to a ship on the ocean with the captain always alert to make corrections. Sometimes it needs major corrections; at other times it needs minor adjustments - if the overall direction is still within the overall scheme of things it is going fine. You can read an interesting article on “HOW DO SHIPS NAVIGATE FROM PLACE TO PLACE ON SEA?” Click here.

How can I make a difference? I am not doing crime. I am not in an adulterous relationship with another person, be it male, be it female.

The next question is: Is there anything else and beyond living an upright life that I can do to make a difference? I suggest to you that there is a myriad of other things over and above the normal "good life" that I can do. Don't freeze into inaction and withdraw from society because you are disappointed or because you became cynical - do something over and above your good upright life you are living.

I want to explore new ways to get involved from now on in my blog write-ups.

Zuma, I dubbed him the Contortionist, is enemy number one so called. Or is he? I am not going to try to suggest an answer.

I stated above that I am positive that there is an answer to most of our problems to be found in the Christian ethic. You should, however remember that I don’t have all the answers; I will suggest some guidelines and will offer some suggestions. I suggest to you that even Viktor Frankl's logo philosophy supports this view.

We have to live ethically and morally upright lives.

The Bill of Rights in the Constitution refers to inter alia equality, human dignity, life, freedom and security of the person, slavery, servitude and forced labour, privacy, freedom of religion, belief and opinion. You can download the Constitution from this website and go to the Bill of Rights to read it yourself.

I don't need a Bill of Rights to inform me that we ought to treat people with dignity. Or that women and children should be protected.

Government released a draft national action plan on how to counter xenophobia, racism and other problems you can download it here. You can get in touch with governmental officials to find out more about what you can do by clicking here and here and here. Your response should be filed before 30 June 2016 - I dare you to read it and make some suggestions.

I don't need the United Nations' Conventions to inform me that foreigners/refugees need living space. Why should I be guided by International Treaties to try and stop genocides? Or to know that it is evil to the very depths of these acts.

Maybe you will say that one has to look at the facts! Be real, man! Well, I am acutely aware of the facts - you can just have a quick look at the contents of my blog. Just remember that it is not everything that I know. I practised at the Johannesburg Bar during the 1990's and have seen a fair number of people who died violently on the streets of Egoli; there were bombs that exploded in buildings whilst I was in it. 

Let me put my money where my mouth is with this BlogSpot of mine. 

It gives me great pleasure to tell you about Afrika Mhlope. No I haven't met the guy yet. I was referred to a video recording of his speech some time back. I to me via a friend, via a friend, via a friend and eventually it landed on my laptop via my wife.

I was reluctant at first to watch the video recording. After some beating around the bush I decided to give him a chance. I am amazed at what he has to tell us. He spoke about black pain and white guilt. Now, I can almost hear you objecting, you cringe and say: "Please, man! Another one of those!" And your eyes roll around in your head. That was my reaction and perhaps a little bit worse than that.

His message is challenging. So was Dietrich Bonnhoefer's. Dietrich's classic THE COST OF DISCIPLESHIP is extremely challenging! If you haven't got the book, get it. I cringed when I read Dietrich's book; when you click here, you can read about it on the web.

I experienced more or less the same feelings when I listened to Afrika. You can look at Afrika’s video at this link.

Why are these two gentlemen's messages so challenging? Because it is based on the Sermon on the Mountain to be found in the Gospel of Matthew chapters 5-7. You can download Bibles from the internet and can even have it on your smart phones. Go this website and you can pick and choose which version you want to download.

If you haven't got a Bible, get one. Go to the Bible Society’s catalogue on their website at this link and order your copy.

And so is Christ's Sermon on the Mountain challenging and radical. The Gospel of Jesus Christ is challenging. I overheard a gentleman the other day stating categorically: "If someone says that he is a Christian, you know for sure he is telling a lie!" That is challenging! 

I challenge you to take up the Gospel message and run with it.

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SUDANESE REFUGEE GRADUATED AT UNIVERSITY OF JOHANNESBURG CUM LAUDE

The invitation to Felix Made's graduation ceremony on 21 October 2014 at the Auditorium of the University of Johannesburg

Felix Made, a Sudanese refugee, graduated cum laude on 21 Octobter 2014 at University of Johannesburg with a diploma in Biomedical Technology. This took place in the very Auditorium that was burnt down on the night of 16 May 2016 by uncivilized barbarians. You can look at a YouTube video at this link.

Now this once proud Auditorium was privy to many wonderful occasions and extremely proud moments for refugees, fathers, mothers, brothers and sisters and other family members.

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THE UNIVERSITY OF JOHANNESBURG BEING SET ON FIRE - R100 MILLIONS RAND DAMAGES

This is what is left of the UJ's Auditorium after uncivilized primitive barbarians set it on fire

This a another photo of what is left of the proud Auditorium of UJ where civilized people gathered in the past with the sole aim of making a contribution to build South Africa

Can you believe this? It is the most shocking thing that can happen at any institution of learning. It seems as if the only words to describe the people who are responsible for this as uncivilized, primitive barbarians.

This Auditorium is witness to many proud and auspicious gatherings of proud and learned men, women and children - but these uncivilized brutes got hold of it!

This is the very Auditorium where I graduated with my LLB degree many years ago. After that occasion my wife and I were present when our children graduated there. My wife and I were present when some of my refugee clients graduated there - I can hear the singing and the roars of proud parents and students waving and shouting of pure pleasure of being in the Hall. There are many thousands of people who have witnessed some of their proudest times of their lives in this Hall - now reduced to ashes and memories.

How many parents have suffered shortages in their private lives to make financial provision for their children to eventually graduate there? There must be countless people who can attest to this fact just to be confronted by this barbaric act of the utmost proportions.

They even arsoned the computer laboratory which was there to assist the under privileged students. You can read an article by clicking here.

There is now nowhere to go or a uncivilized brute can/might/will appear during the night to light a match and destroy. Well, I do remember that the  a similar barbaric act of arson

Having said all of this, one should remember that the ultimate crime remains murder.

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ZUMA WILLING TO STEP DOWN!!!!!!!!

This man stepping down? It must be a hoax!

Dancing in Parliament about Nkandla!

Zuma willing to step down? Can you really believe what you read here?

I can assure you that if this is not a hoax then the ANC will back down with the usual "... we are quoted out of context ..." nonsense!

There are even this report that this man wants to "... bow out gracefully ..." I ask the question whether it is at all possible that such a man can do anything "... gracefully ..."? Even if he gets legal advice, be it good advice or bad advice as was suggested in the Con Court judgement in the case against the EFF.

"The top ANC members told the Mail & Guardian that they had been secretly working on an "exit strategy" for Zuma ..." This is a direct quote from the previous link. It is suggested that they are working hand in glove with the next president to prepare a unconditional presidential pardon for this man; and the next incumbent it working on granting  this man presidential honours in terms of the Constitution.

When one reads these reports it sounds as if ... as if what? I don't trust this at all. But it says it all: This man cannot take a stance as a man and resign. He even mocked the Con Court by his so called "reprimand" of the ministers.

Don't get you hopes raised at all - daar is 'n slang in die gras ["there is a snake in the grass"].

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THULI MADONSELA: SOMEONE IS TRYING TO KILL ME

Front page of the Sunday Times of 8 May 2016

This is shocking news from a trustworthy person, Advocate Thuli Madonsela. I suggest to you that she has done an enormous amount of good work in South Africa so much so that the influential TIME Magazine named her amongst its 100 most influential people. She was called South Africa's fearless public advocate.

And now she is fearful for her life!

She even alleges that her allegations were not treated seriously by Crime intelligence officers. Well, Madame Thuli what did you expect? Even the Contortionist joked about Nkandla; these intelligence officers know they are safe because of what their president is doing in parliament.

The plans are that she will succumb in a fake motor vehicle accident. Now we all know that if this lady is killed in a motor vehicle accident, it was a successful assassination. These are chilling words to write down - but it comes from a reputable person who successfully tackled the Contortionist and were vindicated by the highest court in R.S.A. namely the Constitutional Court. You can download this interesting case to read at your leisure as well as at your consternation.

I don't advise the Advocate to confide in the Contortionist as he would in all probabilities just sit and giggle like a raunchy schoolchild. Please read my previous blogpost in respect of the shameful behaviour of the Contortionist in Parliament. When he was taken to task about his shameful disregard for Parliament, the Speaker [the same person who figured in the Con Court case and where she lost] ordered the speaker to sit down.

When I read this report in the SUNDAY TIMES I was vividly reminded of a similar incident playing out in my offices. My client phoned me one morning rather early and I could hear naked fear in this man's voice. He told me that what he termed as the clothing mafia are after him to kill him. Fortunately it didn't happen at the time. He had a heart attack while driving his motor vehicle.

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DON'T DIE WITHOUT A WILL!!!

Pablo Picasso died intestate

I was reading on the internet and I came across this slideshow of famous people [some not so famous] who passed away intestate.

Even Pablo Picasso got caught that way.

Can you believe that Abraham Lincoln also passed away intestate.

Abraham Lincoln passed away intestate

Please get in touch with me at my e-mail address: neelscoertse@wirelessza.co.za [before it is too late and your intestate heirs are cashing in]. You may even phone me on 011-783-2248 or 084-456-1030.

I'd love to hear from you.

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