Mystery surrounds the ownership of a R45 million white elephant private property development project in Elsies River that could potentially house more than 200 people.
When asked about the development and its ownership, a spokesperson for the City’s Urban Mobility; Spatial Planning and Environment directorate said:
“This property is privately owned. You are therefore advised to direct your questions to the owner.”
According to IOL, the Provincial Human Settlements essentially said the same.
Since 2019, the 276-unit Stay Junction development appears to have been abandoned after a legal tussle over debt, reports IOL.
At one point the development was allegedly advertised for auction but there are no details available as to whether the building was sold and the auctioneers BidX1 did not respond when asked about the matter.
The auction advert said in part that the four-storey property “consists of 100 apartments, not sectionalised, plus ground-floor retail space. With an opening bid of R45 million and projected rental income of R850 000 a month, the new development can be taken over immediately.”
A search at the Deeds Office uncovered the owner to be a Brian Rass of Cape Town, but when contacted, Rass said he had no share in the property and did not know anybody who did.
Rass, however, said the Argus should contact the Elsies River City Improvement District (Ercid) as they had received a briefing about the development three years ago.
On behalf of the body, Gene Lohrentz said that they had been briefed about the development but it had been a verbal presentation, presented by the developer at one of the Ercid annual meetings at the inception of the project.
Lohrentz said: “We did not receive an actual document and since then we have not been informed of the details of the development at all.”
He said their last communication about the project had been with an ex-staff member of the developer last year, who told them of a court dispute between the contractor and the developer.
According to IOL, a search of court rulings uncovered that in October 2020 the development ended up in the Western Cape High Court over a contractual dispute involving the developers, E-Junction Property Developers (EJPD), and the builders, Good Hope Construction (GHC).
In terms of the contract, GHC construction entered into an agreement with EJPD, to build the development for R126 million.
The dispute related to a guarantee for payment by E-Junction property developers to Good Hope Construction in lieu of a builder’s lien, which is a right to keep possession of property belonging to another person until a debt owed by that person is discharged.
The court was told GHC expected EJPD to provide them with a guarantee for payment or a builder’s lien.
GHC argued that EJPD’s failure to provide a payment guarantee was a material breach of the contract from its inception and this had a serious knock-on effect, including several subcontractors demanding upfront payments and failure to obtain short-term financing from its bank which would have supplemented cash flow for the project.
The matter appears to have stalled in court, with the judge saying:
“It is abundantly clear that the factual disputes cannot be resolved on the papers before me.”
Picture: Brown Barrow Altini Consulting/ Facebook