October 17, 2006
By Ndaba Dlamini
TWO buildings in the inner city, Norvena Court and Santa Monica, will be expropriated by the City of Johannesburg as part of its efforts to rid the area of slum buildings.
The two will be expropriated through the Better Buildings Programme, an initiative of the Johannesburg Property Company (JPC) committed to refurbishing dilapidated buildings in the suburbs of Hillbrow, Berea, Yeoville, Joubert Park, the CBD and around Ellis Park.
JPC has applied for approval from the City council to expropriate Norvena Court and Santa Monica, a process that can take six to eight months, according to a report from the company.
Located in Hillbrow at the corner of Paul Nel and Claim streets, Norvena Court is a 12-storey building consisting of 60 bachelor flats, 42 one-bedroom and 24 two-bedroom units. The building has been empty since residents were evacuated and the building was closed two years ago after an urgent application to the High Court by the City.
In 2004 the building was found to contravene many by-laws by the Inner City Task Force, a strike team of agents, council employees and law enforcement officers. It had no fire hydrants, sewer pipes were broken and the basement was flooded with raw sewerage about 1,4 metres deep. Since the evictions, the building has been vandalised and water and electricity services have been suspended. It will cost R9-million to repair the building, according to JPC.
Situated at Webb Street in Yeoville, the five-storey Santa Monica building is in a "severe state of economic decay". The building consists of four bachelor units, four one-bedroom units and five two-bedroom units. There are also five parking bays. It is vacant with no services and has been severely vandalised. All fixtures and fittings have been removed.
According to JPC, the current value of the building is R75 000 and it will cost R2-million to refurbish.
Sectional title schemes have been established at both Norvena Court and Santa Monica and the flats are owned by many different companies and individuals. However, the bodies corporate legally obliged to manage the affairs of the buildings do not exist and no records of accounts could be found.
Efforts to recover municipal debts owed by the sectional title holders have been made by the City but most of them have either died, emigrated or can't be traced. The cash they owe is still outstanding.
Because of this, acquiring the buildings is a protracted process. For the City to deal with these properties, the buildings have to be bought so that they can be onward sold. But for the City to buy them, they have to acquire each and every sectional title unit. This would require purchase at multiple sales in execution, liquidation applications or sale agreements in respect of each unit in the buildings, according to JPC.
"Such a process would be all but impossible because of the difficulties locating many absent unit holders who have abandoned their units, other unit holders' resistance to the process and the real prospect of other parties acquiring the units in preference to the council at public sales in execution."
Under these circumstances, the only practical way to deal with the buildings is for the City to acquire ownership through expropriation of all the sections and the whole of the common property of the scheme. If the property is expropriated, it can be sold under policies of the Better Buildings Programme.
Before finalising the expropriation of the two buildings, however, JPC will offer the properties on an auction sale to the Better Buildings Programme participants registered on the programme's database. There are about 300 of these participants. Proceeds from the auction will be used to pay council and utilities debts and other proven creditors. If there is cash left over after these payments are made, it will be distributed to unit owners in proportion to their participation quota.
If the sale price of the buildings does not cover the full council and utility debts, a request will be submitted for write-off of the balance. After the auction, JPC will start the expropriation and the successful buyer of each property will be required to provide a detailed upgrading plan for the property, including specifications of finishes, time frames, cost and post-construction management plans.
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