Cape Town – Families of Richmond Park who formed a community trust and leased their prime property to investors for 99 years are unhappy with the agreement.
The families stated they only received one payment, while the investors say each received R100 000, and that they are happy to iron out any confusion.
Despite receiving payments, the families say there are living from hand to mouth.
In 2014, after a Restitution of Land Rights Act claim was approved, the community, which was removed in 1972 under the Group Area Act, had it transferred back.
More than 5 000 people moved to areas such as Atlantis and other parts of Cape Town through the forced removals.
It was after this that the community formed a community trust known as the Richmond Park Communal Property Association (CPA) which saw them lease the property to investors such as Atterbury Property, and the association became 25% shareholders in the development company.
Carol Jones, who is from one of the families that entered the lease agreement, said she was born and raised in Richmond Park, and she was seven when they moved to Atlantis.
“We remained in Atlantis and I have my own home and lost both my parents. My mother applied for the land claim, back then. She was the main beneficiary. She passed away in 2014, and when we received the first payment of R100 000, it was split between me, my two sisters and my father. My father received the majority, 50 percent, and the rest distributed among the siblings. My father died three years ago,” she said.
Jones said the trust told them they would be riding on this gravy train.
“The only people we see now driving on this train are the investors and those that are sitting on the CPA.
“There were 401 claimants, they were elderly and didn’t know what they signed back then. We wanted to go to the meetings, (but) it was only the main beneficiaries who could attend. The land is being leased for 99 years. Where is the money that we are supposed to get? These are trying times we are living in. Many of the claimants do not have food to put on the table, and now we are living in the time of the virus,” she said.
The former chairperson of the trust, who asked not to be identified, said he was seeking legal advice, and could not comment too much about the issues being raised.
He said he felt like history was repeating itself.
“Our parents were elderly and were not educated enough to read the legal documents and they (investors) had their own lawyers present while these agreements were signed.
“Now it is like history is repeating itself after the land was taken and now again, we see the same happening to the families,” he said.
A new trust has yet to be elected due to the current lockdown regulations regarding gatherings.
Gerrit van den Berg, head of development at Atterbury Property, said each family received R100 000 in two parts for a 99-year leasehold rights.
He detailed the transactions, stating there was often confusion about the payments and the lease agreement.
“A common misconception that I get is that some of them are of the impression that there is a fixed annual rent payable, like in a normal rental agreement. This is not the case where you buy a long-term leasehold title.
“We won a tender in 2008 after scrutiny by a committee, as well as government and the land claims commission deciding that our bid was the most favourable. Every family received R100 000 (in two tranches) for the 99-year leasehold rights.
“The community (CPA) also became a 25% shareholder in the land development company. We have done extensive negotiations with the financiers to change the normal model of settling all debt before dividends of profits can be distributed to shareholders. They agreed that the ’paper profits’ per land deal can be distributed to the 25% shareholder (CPA) on each deal. I can check the exact date, but some of those profits we distributed around 2017.
“Subsequently, more deals were done. The ’paper profits’ on these deals were calculated, and the board approved distribution of these funds at two previous board meetings, in 2019 and 2020.
“In both cases, the board approved that it’s not a dividend (where all shareholders get money) but rather an ’advancement of future profits’.
“These amounts would then be distributed and added to the loan account of the CPA, interest free.
“The committee of the CPA had 21 days to accept these funds. Unfortunately they have not done so in either of the two instances.
“This was a real pity, as the board had to consider such, which is definitely not the norm, but the committee failed to act on this,” he said.
He added that debt was very high before they could get to a point of profits.
“Normal dividends would flow from completed buildings, once debts are settled. Current debt is very high.
“A normal free-standing building would, as a rule of thumb, take about 10 years to settle debt, before dividends can be considered. It is thus anticipated that in years to come, there will be an annual recurring income.
“It will just take a few years before we get to that point,” he said.
Van den Berg said he was happy to discuss any issues families may have, and that he understood there was confusion due to information not being shared with everyone.
Zara Nicholson of the Department of Public Works and Infrastructure said they could not comment, as the land became the responsibility of the owners.
“Once land is transferred to claimants, it is under their ownership and their discretion what they do with the land, unless (there are) certain conditions,” Nicholson said.
Weekend Argus