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Developers and Sectional Title Projects 2
Sectional Title Magazine
Article Two
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 founding Managing Director of the National Home Builders Registration Council, he also served as a member of the Estate Agents Affairs Board from 1996-2000 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 look into one of the common problems he faces, the Developer not fulfilling their contractual obligations after occupation.

I can not count the number of times I am employed to resolve problems where new residents of Sectional Title projects are being messed around by Developers!

Let me give you some examples:

One project in Pretoria involved a town house complex where the trustees had formed a technical committee to try to resolve the fact that in their second year of occupation they had spent R40 000 more on water than in the first year. The cause, 26 water leaks repaired in that year.

What had they done about it? They had tried the developer and guess what, he had said that the plans had been approved by the Local Authority; the water system had been designed by an Engineer and the works had been signed off as OK; it was more than a year after occupation and therefore it was "Not his problem"

Does this sort of comment ring a bell with anyone?

Another scenario we handled was where in Johannesburg a Developer had obtained occupation of all the units in the complex, however the 80 metre section of road outside the complex entrance has not been completed. Therefore the only way the residents could gain access to the project was through a hole formed in the back wall of the complex (fortunately on a parcel of common property).

Once again the Developer, who was responsible for the road, simply claimed that he had run out of cash and was unable to complete the project!

In the third of my examples this month, another developer has built three complexes in Midrand where all three demonstrate the same problems: The floor tiles in the units are cracking badly, the electricity supply constantly trips, Telkom is unable to use the blocked conduits installed by the developer and the intercom systems never work.

In all three examples the problems are exasperated by the Developers lack of co-operation, their aggression and offensiveness. A destructive cycle of belligerence between the trustees and the developer then ensues.

What can the trustees do in situations like this? The answer, call in an expert.

When we at Baobab address a trustees meeting we usually have to caution the Trustees about their threats of grievous bodily harm against anyone linked to the developer. We also advise that the press is also not the best option at this point.

After we have established the facts we are usually able to inform our clients that the Developer IS responsible for their problems but the manner in which we address the problems is the key to an amicable settlement.

In our first example we inspected the pipes that were being excavated to find that the pipes were not to SABS and had not been laid according to proper specifications. This was causing both joint and pipe failures and hence the leakages. The correct standards and methods were documented in our report which was tabled with the developer's attorneys. A meeting was arranged, chaired by ourselves and it was clear to all parties that the matter was being dealt with on a non-emotional and purely factual basis. It did not matter to us that verbal abuse had taken place before; it did not matter that the parties couldn't stand each other. All that mattered was that we could show the developer and his legal representative, from an expert's point of view, how physically incorrect the developer was in terms of the installation.

The meeting lasted less than one hour after which the developer agreed to replace the water supply system completely and at his own cost. The only problem thereafter was to arrange a schedule of works as resident's gardens had to be disturbed in the process. Incidentally we learned how to divine for water in the process!

The following principles apply to all such matters and certainly to all the examples mentioned in this article:

The Developer is the person with whom you have a contract, not any subcontractor plumber or electrician,

The Developer must provide the product as shown on the sales contract documentation (we covered this in our last article),

The Housing Consumer Protection Measures Act obliges all developers to:

Rectify defects notified within the first 90 days of occupation,

Rectify Roof leaks occurring and notified within the first year of occupation and

Rectify any structural defects occurring and notified within the first five years of occupation. These last three mechanisms are "inherited" by subsequent owners of the property within the first five years.

However most owners are not aware that the Developer is also responsible for latent defects in the property.

Latent defects are problems that occur and which are caused by an inherent defect in the design or construction of the property (both common and private) and which only occur after a period of time. As in our example of the water supply, we were able to demonstrate that the problems would not have happened if the pipes had been SABS quality and they had been laid correctly. The proscription period for latent defects is three years.

Now don't all go running to your developers crying "latent defects!" as the proof of the inherent nature of the defect is on your shoulders. Therefore call in an expert to assess the problems and write up a short report and even approach the developer on behalf of the trustees, so as to cut through any bull dust that the developer may and usually does, respond with.

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.