The high court has slammed the Ekurhuleni Municipality for “delinquency” in a landmark eviction case that saw a property company pay an owner to vacate.
The municipality failed to deliver a report to the court for over a year in the eviction case that was eventually granted.
Despite concerns about the homelessness of the family, including young children, the court found the property company’s offer to pay R80,000 covered concerns.
The case can be used by other SA property companies in eviction dealings with buyers who refuse to or cannot meet their financial obligations.
In 2017, property company Final Housing Solutions (FHS) agreed to sell a Gauteng property to Luvalo Lukhanya for just over R200,000, formulating a scheme that was in part financed by a guarantee of R160,000 by the Gauteng MEC for human settlements.
Before the property could be transferred into Lukhanya’s name, however, he had to pay about R50,000 in outstanding rates and taxes. However, none of the payments from Lukhanya occurred and the amounts accumulated over the years. Eventually, FHS terminated the sale in 2020. This resulted in failed negotiations between FHS, Lukhanya and the MEC’s office. In 2021, the subsidy was set to expire.
FHS then instituted proceedings against Lukhanya, his family and other tenants who were paying rent to Lukhanya. By the time the case came to court in 2022, Lukhanya owed nearly half a million rand to FHS.
In 2022, FHS argued before high court judge Stuart Wilson in Johannesburg that Lukhanya should be evicted due to not paying to enable FHS to place the property on the market. However, Wilson was reluctant to grant an eviction order.
“I was given no real information about Mr Lukhanya’s circumstances, or those of the other occupiers of the property,” Wilson said about the 2022 hearings. “I was concerned that an eviction order might render Mr Lukhanya, his family and his tenants homeless.”
Also of concern was the original intent of the sale occurring “with the assistance of a state housing subsidy”. Such subsidies “provides access to state assistance”, according to the department of human settlements, for qualifying individuals to provide housing.
As a result of these factors, Wilson postponed the matter, directing FHS and the municipality to file reports. with more information. FHS “promptly complied” but “the municipality and the MEC did not”. Wilson slammed the municipality for its “delinquency”.
“It took over a year for the municipality to do what it had been ordered to do: visit the property and assess the needs and circumstances of those who live there,” the judge wrote. He noted this only happened after “the municipality had to be declared in contempt of one of the orders”.
The judge said: “A great deal could probably be said and done about the municipality’s disregard of its constitutional and statutory obligations, and particularly of its ongoing failure to comply with my order for such a long period.”
Disappointment
However, he only recorded his “disappointment” about “the municipality’s delinquency”.
The findings showed there were other tenants who could easily move out of the house. However, Lukhanya and his wife are unemployed and dependent on the rental income from other tenants to provide for them and their young children.
Wilson also noted the current value of the property, about R600,000, and that Lukhanya was in no position to buy it — even with a R160,000 subsidy.
Wilson was concerned that eviction would leave the family, including young children, homeless. FHS then offered an unconditional tender of R80,000 for Lukhanya to vacate. He rejected the offer but Wilson imposed it. “If they are paid the amount tendered,” Wilson wrote, “Lukhanya and his family will be under no meaningful threat of homelessness for the foreseeable future.”
Wilson ordered that most of the money be held in trust until Lukhanya vacated the property. He gave the family just over three months to vacate. He made no costs order.
The ruling can be used by other property companies in SA to fashion a just way to evict in similar circumstances. This is due to the payment covering the issue of homelessness, which, as Wilson noted, was a main concern in eviction proceedings.
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