City sued

17 September 2018 | Government

Marc Springer - The developers of the Elisenheim estate have sued the Windhoek City Council for alleged breach of contract, saying that they lost interest of around N$70 million on income.

The Elisenheim Property Development Company claim is based on a contract signed with the City on 13 December 2011.

The parties agreed that the plaintiffs would build and sell private homes on the approximately 1.2ha Elisenheim farm as well as 21 adjacent extensions. In addition, it was agreed that the plaintiffs would provide all necessary infrastructure, such as roads, sewers, lighting, electricity and water supply, and would subsequently certify in writing that the work carried out would comply with the applicable building regulations.

In addition, it was agreed that the City could refuse the necessary clearance and thus prevent a transfer of land to individual buyers, if the plaintiffs did not meet construction requirements.

According to the plaintiff, this release or refusal should have taken place within 28 days after completion of a respective construction phase. The relevant certificate was in turn a prerequisite for the plaintiff to transfer individual erven to individual buyers and to register it with the land registry.

However, because of “deliberate or neglectful omissions” by the municipality, this was delayed by 105 days for one of the extensions and by 54 days for another, which meant that the affected erven could not be transferred.

For this reason, some prospective buyers cancelled their purchase, and the plaintiffs suffered a loss of N$283 million.

The developers hold the City responsible for this loss, since they say Council should have known that the plaintiffs depended on income from real estate sales and always operate under great time constraints. Also, income from the sale of homes are a prerequisite to continue with the overall development.

In addition, many of the buyers planned to finance the purchase of their property through bank loans and, for bank security reasons, they relied on adhering to previously agreed on completion timelines.

Apart from that, construction costs increased due to the “unjustified and unnecessary” delay on the part of City Council, and the developers incurred further expenses.

Furthermore, the plaintiffs say they lost an income of N$283 million along with N$70 million worth of interest, which they are now claiming from the City.

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