Court comes to rescue of widow defrauded in property transfer

THE courts have the power to cancel the transfer of a property in cases where an agreement and subsequent transfer were obtained through fraudulent means, a recent judgment has confirmed. 

The case involved a woman who was defrauded into thinking she was signing documents to obtain a loan to build a flat at the house she had inherited from her late husband, only to discover that she signed “an agreement of purchase and sale”.

The court at the time cancelled the transfer of the property into the name of the new buyer, but the latter now approached the Gauteng High Court, Pretoria, to appeal the judgment issued in favour of the elderly Annette Venter. 

In the opening to the judgment, Judge Rochelle Francis-Subbiah, on behalf of a full bench (three judges) noted that the appeal concerns a “fraudulent scheme” perpetrated by the Reverse Mortgage Company (Pty) Ltd (RMC) and its associates on Venter. 

Venter, now in her 70s, battled for several years to get the house back after she was forced to move by the then liquidators of one of the companies involved in the transaction.

She explained that after the death of her husband, she was looking for money to build a flat in order to generate income but she was turned down by banks. At the time, she had estimated the cost of building at about R 100,000,00.

She read an advertisement in a newspaper by RMC, offering loans to homeowners for improvements, university and school fees. The loans were to be backed by a reverse mortgage bond. 

The only conditions, Venter said, were that the homeowner must die “sooner than later” and they must have equity in their property. A mortgage according to her would be registered over the property to secure the homeowner’s indebtedness to the financial institution. The amount outstanding on the bond would be paid by the estate upon the passing of the homeowner.

RMC officials came to evaluate her home and she completed documents for the R 100,000 loan. It was explained to her that RMC does not pay the amount upfront but in the form of a “pension” payable monthly. 

Later, when the horse had long bolted, she learnt that the modus operandi entailed, amongst others, that she was selling her home to a shelf company.

Prior to this she was required to sign documents relating to the “loan” which actually stated  “agreement of purchase and sale”. Venter said she threw caution to the wind and signed the papers without reading and sent them back. She reiterated that she had never intended to sell her property to RMC or anyone.

Venter was later required to sign more documents at the office of an attorney, but she said that no one explained anything to her before signing the papers. She later learnt that the papers were to affect the transfer of her property.

After signing all the paper work, she never again heard from RMC. Her calls to them went unanswered and she never received any money. She subsequently received a letter from the bank detailing the fraud perpetrated by RMC upon homeowners which often included evictions. She was later evicted from the property via a court order after the property was transferred to the new owner, a company called Monument Park 110 Ltd. 

The latter argued that Venter had voluntarily sold her house and that it is the legitimate new owner. But the court maintained Venter was misled by RMC in signing the documents. It was found the eviction order was rightly set aside to restore her possession to the property. The appeal by the new owner was subsequently dismissed.

Cape Times