A couple who lost their family home through a fraudulent scheme, where they thought they were signing documents to obtain a loan, but without realising it actually signed documents for the sale and transfer of their home to the company from which they sought the loan, turned to court to have the “agreement” set aside.
The couple, only identified as Mr and Mrs S, turned to the Gauteng High Court, Pretoria after they found themselves without their home, which belonged to a family trust. Realising that they have fallen victim to a fraudulent scheme, they successfully asked the court to declare all the documents they had signed in relation to the “sale” of their home to be declared null and void.
As a consequence of the order in their favour, the property is now once again back in the hands of the family trust.
The trust lost ownership of the property through what is said to be a fraudulent scheme known as reverse mortgage scheme perpetrated by Asset Management Specialist (AMS), a company which has meanwhile been deregistered, and associated companies, including Southern Spirit Properties 87, which is now in liquidation.
At the time when the trust lost ownership, both applicants were trustees thereof. They said that for their part, they did not consent to the transfer nor did they have intention to sell their property.
According to them they were tricked, by the fraudulent conduct of AMS into signing certain documents that gave effect to the transfer of their property into the name of AMS in circumstances where they thought they were signing documents for their application for a loan.
The applicants purchased the property in Woodhill, Pretoria, during 2000 as a family home. They owned the property through the trust.
They found themselves in financial difficulties in 2005 and saw an advertisement where AMS was offering financial assistance in the form of loans to people who were in debt, including those whose credit records did not permit them to obtain credit facilities from credit providers.
They approached AMS for financial assistance and asked for a loan of R300 000. They consulted with one Mr Bernard of AMS who advised that AMS would offer the needed financial assistance on condition that they register a second bond over the property as security for the loan.
They were made to sign certain documents on the pretence that they would enable AMS to restructure the assets of the Trust, to obtain the loan and to secure and register the second bond over the property.
The applicants believed that they were concluding a loan agreement which would be secured by registration of a second bond over the property and they subsequently received R200 000.
It was only after they did not receive their municipal accounts and enquired about this, that the municipality told them that the property belonged to Southern Spirit Properties. They went to Investec Bank with whom they had a home loan to make enquiries and were told that their bond account had been settled with the payment of R910 000 which was outstanding then for their home loan.
The liquidators of Southern Spirit Properties meanwhile sold the property in a public auction to a Mr Kotlolo (who was unaware of the scam) and who registered a bond over the property. The applicants still refused to vacate the property contending that it was theirs. However, at a later stage they succumbed and moved.
In terms of the scheme, AMS would lure clients who were in need of financial assistance into believing that it could provide such assistance to them by for instance securing a second bond over their properties.
A client would be made to sign some documents purporting to be a loan agreement in which the client’s property would supposedly serve as security for the loan. Unbeknown to the client, the documents constituted a sale agreement in respect of the property.
Upon signature of the documents, AMS would surreptitiously sell and transfer the client’s property to another entity controlled by the very AMS.
Upon transfer of the property to an entity controlled by AMS, the former would obtain a mortgage over the property with the assistance of AMS, who also would arrange for bond payments.
AMS would meanwhile continue to take monthly payments from the client under the pretence that they were repayment of the loan.
The property would later be sold back to the client from whom it was surreptitiously transferred. In this regard, a sale by instalment agreement would be concluded. In order to secure the sale back, the client would be granted an option for a consideration equal to 12,5% of the purchase price of the property.
This option would be available and exercisable by the client after 18 months against payment of the same purchase consideration. In this matter though, this second transfer did not occur.
In ruling in the applicants’ favour, the court said they have set out the evidence that led to the fraudulent transfer of their property.
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Pretoria News