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Sectional Title Magazine
Article One
Developers and Sectional Title Projects
Sectional Title Magazine: 5 April 2005

Proposed Editor's Introduction

Sectional Title brings you a new perspective on developments. Peter Allsopp is owner of Baobab Consultants a company specializing in trouble shooting problems between consumers and home builders. Peter was formerly the designer and founding Managing Director of the National Home Builders Registration Council, so he should know most of what there is to know about the problems experienced by new home buyers when they purchase that most important asset, their new home.

Over the next few months Peter will provide us with a series of insights into the many pitfalls experienced when purchasing your new home in a sectional title development.

In this month's edition he brings you a brief look into one of the biggest problems he faces, the building contracts and specifications.

"Darling I just love this show house, lets buy here, we have looked at so many places, this is the one".

At last after picking up so many flyers from the traffic- light guys and visiting so many show days, you think you have finally found that dream home.

You have done the right thing, you have looked at several developments and compared prices; you know where the schools are and what the traffic will be like in the morning rush hour; you have dealt with the sweaty sales guy, who did nothing for the image of the project; and now at last.

The sales guy knew what he was talking about, we can have a good choice of finishes, he even allowed us to change that second and third bedroom into one bigger room (even though he said his boss would jump down his throat for being so accommodating). And that show house was just divine!

You sign the agreements,

"Yes I know there are a lot of papers, but there is a land sale and a building contract to sign for" says Mr Smoothie. "Don't worry, we have built hundreds of these houses".

You leave the sales centre and its tinkling water features behind and glow in the glory of new home owners all through Sunday lunch. You even get the champagne out.

A few months pass, your bond has been approved and the Lawyers are doing whatever they have to do. You have visited just about every building and kitchen showroom in town; you call at the show house to see how the project is going.

"Where is our house you ask" the clerk on the front desk.

"No well there has been a problem with registration" replies Ms Poppy.

"Oh well lets talk to Mr Smoothie he promised us there would be no delays and we could be in by Christmas."

"No well Mr Smoothie doesn't work here any more all the units have been sold he is now down in Cape Town, Mr Right will help you".

Mr. Right you find is the bakkie outside with the kortbroeke who tells you that there is a problem on the planning side, "No nothing to do with us, it's the pen pushers". "Besides" he adds almost cheerfully, "it's in the contract! See here completion will happen in 5 months subject to," and then he reels off a whole page of subject tos.

Subject to proclamation, subject to plan approval, subject to the builder's other commitments; subject to everything other than actually building.

"No, and there is another 31 days as the construction goes over the Christmas period!"

"It was promised to be completed BEFORE Christmas",

"No, sorry missus it's in the contract!"

Smarting from this bursting of your dream-house-bubble, you decide to go with the flow.

On one Sunday EIGHT months later you visit the site and find they have fitted a single light point in the middle of each room. But the show house had all these lovely down lighters that made the house look so special. On Monday you phone Mr. Right and are told,

"No that's what's in the Contract".

It is only then that you read the small and very poorly copied print of the specification that is at the back of all those many documents you had to sign and find the clause that says "One light point per room" and another one even smaller in the development agreement that says, "The purchaser is aware that the materials used in the show house are not necessarily those used in the new house". You had read it before but you thought that meant the bricks or concrete or whatever.

So sheepishly you ring Mr. Right again and ask how much for the extra down lighters.

"No, can't do now, its too late, it's in the contract!"

What do you do? And what should you have done to prevent this happening?

The answer is simple.

Employ the services of a professional building expert (and we don't mean your uncle who has built his own extension) to advise you on the pitfalls of the contract, BEFORE you sign it.

At Baobab, almost every day we see someone who has fallen into this dream-house-spec-trap. The problem is magnified by the fact that the developer can and often is willing to allow you to cancel. After all he can sell the house to some other schmo and make another R50 000. You on the meanwhile will have to go back onto the road and will invariably end up having to pay more for the next house as prices are skyrocketing.

But beware of this too as we have seen contracts that state if you cancel, even by mutual agreement you loose EVERYTHING you have paid to date! This could mean deposits or even the land price.  

We have been involved with a developer that undertook some of the agreed design changes that were requested as described, but did not do others. When the client brought this to the developer's attention, he simply refused to rectify and told the client to cancel! As this was some 14 months after sale, one can imagine the potential price difference.

The same applies to the specification. Do not get star struck by the show house. Get a professional to advise what is in and importantly what is not in the specification. There is no such thing as a "Standard Specification".

It is important to know things such as how much allowance is there for flooring and wall tiles, for electrical fittings and sanitary ware. How much for your kitchen, do you get that beautiful oak and granite kitchen that is in the show house or have you got just enough for a few cheap cardboard units?

What light fittings do you get, that chandelier in the show house?


If you have any questions on these, or any other developer related matters, Peter can provide some assistance and direction. Click here to contact Peter.

Next edition we will be talking about site development and building plans.