The applicants were beneficiaries of a state-subsidised housing programme administered by the Cape Town Community Housing Company (CTCHC). Between 2000 and 2001 they concluded identical instalment sale agreements for their homes. In terms of the Alienation of Land Act 68 of 1981 (ALA), CTCHC was obliged to record these agreements with the Registrar of Deeds, but failed to do so for more than a decade. Despite this statutory failure, CTCHC continued to receive instalment payments. The homes were allegedly defectively built, leading to irregular payments by the applicants. In April 2014, CTCHC belatedly recorded the agreements and shortly thereafter issued section 129(1) notices under the National Credit Act 34 of 2005 (NCA), alleging arrears but not specifying the amounts owed. Without cancelling the agreements first, CTCHC sold the properties to a trust. The Registrar of Deeds later cancelled the recordal, and the properties were transferred to the trust, which then instituted eviction proceedings. The applicants challenged the lawfulness of the cancellation and subsequent sale.
Leave to appeal was granted and the appeal was upheld. The High Court’s order was set aside and replaced with an order declaring the cancellation of the instalment sale agreements by CTCHC unlawful and setting aside both that cancellation and the Registrar of Deeds’ cancellation of the recordal. CTCHC’s application to adduce new evidence was dismissed, and it was ordered to pay the applicants’ costs.
This case is significant for clarifying the protective purpose of the Alienation of Land Act in relation to vulnerable purchasers of land, particularly in the context of subsidised housing. It affirms that sellers cannot benefit from their own failure to comply with statutory recording requirements and strengthens consumer protections under the National Credit Act by confirming that section 129 notices must contain sufficient detail, including the amount of arrears. The judgment has important implications for access to housing and security of tenure under section 26 of the Constitution.