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Sectional Title Retirement Estate

By Riette Eiselen on Thu, 11 Apr 2019 at 14:41

An agent of a reputable estate agency sold the unit I owned at Eldoraigne Retirement Estate from July 2016 to present. At the time of my purchase in 2016 there was a clause in the purchase agreement of a 3.5% levy on the selling price, in the case of the unit being sold. I have no recollection of this clause and I did not have a copy of the agreement.
My son suffered from brain cancer and passed away in September 2016. Soon after his passing, I moved to Somerset West to be close to my only other child. Emotionally, mentally and physically, the purchasing of the unit and my child’s passing took a huge toll on me.
I decided to sell the unit in ERE and an offer was received and accepted in January 2017. Only when I received the money from the purchase, I was notified by the conveyance attorneys that a 3.5% levy was deducted from the selling price for ERE.
The real estate agent, being a registered agent and having sold units at retirement estates before, should have warned me that there is clause in a sectional title retirement estate contract of a levy related to selling a unit. This forms part of the law related to sectional title retirement estates).
At the time I asked her to market the property, she only notified me of her commission %, the 3 month ordinary levy and rates and taxes and compliance certificate costs that will be deducted.
To lose more than R54000 (3.5% of selling price) is, for me, as a retired person a huge amount of money. Had I been made aware of this legal stipulation by the real estate agent I would not have sold the property. I cannot be assumed to have remembered - I did and do mot.
What recourse do I have.
Wh

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RE: Sectional Title Retirement Estate

Murray Bennett replied on Sat, 13 Apr 2019 at 01:27

Here is a link to the Estate agents affairs board code of conduct:
https://www.eaab.org.za/download.php?data_id=117
If your opinion is that the estate agent acted negligently you can take the matter up with the EAAB. In my opinion, you are unlikely to have any recourse against anyone having brought the property and signed an offer to purchase/deed of sale agreeing to pay a 3.5% levy in the event that you sold.

RE: Sectional Title Retirement Estate

Annette Stones replied on Sun, 14 Apr 2019 at 03:12

Hi Riette - Exit levies of the kind you describe are not, as you claim, "part of the law related to sectional title retirement estates", but are allowed for under the Management Rules of certain retirement complexes. Regrettably, you would have no recourse against either the retirement estate or the estate agent, since it would legally be assumed that, prior to purchasing, you would have had the opportunity to familiarise yourself with the rules applicable to the complex you were investing in.

I nevertheless, in line with Graham Paddock and Jennifer Paddock, consider such provisions cynical in the extreme, iniquitously exploitative of the elderly/their estates and contrary to their proprietary rights to the full fruits of their property investment. My own mother spent the final seven years of her life in a retirement village in which a "levy stabilisation fund" portion of 20% of the profits was payable to the complex on the sale of a section. As executor of her estate, I fought this, knowing that it was a major bone of contention in the complex (leading to all kinds of ingenious estate planning arrangements) and having discovered that this provision was put in place by the developer with the unanimous agreement of the only four owners (each of just a garage!?) at the time that the building of the complex started. At the end of the day, however, I was advised by the conveyancing attorney to avoid action by the purchaser (given the delaying of transfer) by paying the over R120,000 demanded from my mother's estate "under protest"....Show More

RE: RE: Sectional Title Retirement Estate

Gerhard Bezuidenhout replied on Mon, 15 Apr 2019 at 08:38

Coming to think of the situation, and in my humble opinion, the Exit Levy has great benefits for all in the complex.
The levy is normally written into the Management Rules by the Developer and forms part of the conditions under which the scheme is launched. The aim should be to generate funds to maintain the common property AND (nowadays) to fund the mandatory 10 Year Maintenance Repair and Replacement Plan. A great way not to burden owners with another levy other than the administrative levy.

Everyone buying in is deemed to have full knowledge thereof.
Everyone selling will get his/her/their turn. In this respect the idea is pure; the quantum might be debatable....Show More

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