Abstract

The legislature enacted the Housing Development Schemes for Retired Persons Act 65 of 1988 to regulate the alienation of certain interests in these schemes. The construction most often encountered is the so-called life-right variation, lauded by inter alia the CPOA as follows: “A Life Right is the highest form of a personal right protected by law, making this a safe and secure investment”. Under this construction the purchaser is conferred the entitlement to occupy a portion in a housing development scheme for the duration of the lifetime of the purchaser or, subject to section 7, any other person mentioned in the contract in terms of which the housing interest is acquired, but without conferring the power to claim transfer of the ownership of the portion to which the housing interest relates (s 1 sv “right of occupation”). In the said section 7(1) the entitlement to occupy the designated unit in the scheme “for the duration of the lifetime” is extended to include the spouse of the purchaser: “After a housing interest has been transferred to or has otherwise been vested in a person by virtue of a contract, no person other than a retired person or the spouse of a retired person may occupy the land to which that housing interest relates, except with the written consent of all the holders of housing interests in the housing development scheme concerned”. It is submitted that it could not align with the legislature’s intended purpose with this legislation (to safeguard the interest of retirees as valued but vulnerable members of the society) if the wording of the act and any agreement purported to be governed by it is to be interpreted to result in the immediate disqualification of the surviving spouse as an illegal squatter after the demise of the first-dying spouse as the purchaser irrespective of whether the spouse’s name was mentioned in the original agreement or not. If it is accepted that the surviving spouse is ex lege entitled to the further occupation of the unit, it is troublesome to construct how the life right of the deceased spouse may be deemed to have been transferred to the surviving spouse in those cases where the couple were not joint purchasers and thus co-holders of the entitlement (comparable to the position of co-owners eg as a consequence of a marriage in community of property) regarding this asset and its life-long entitlement. Even if it is deemed to be some form of cession sui generis that is perceived not to be in conflict with the resentment towards a pactum successorium mortis causa, the executor of the estate of the first-dying spouse as original purchaser may have serious problems to present a valid liquidation and distribution account to the master in time: “An executor shall, … within – (a) six months after letters of executorship have been granted to him; … submit to the Master an account in the prescribed form of the liquidation and distribution of the estate” (Administration of Estates Act 66 of 1965 s 35(1)(a)). The claim for the due portion of the original purchase price may not be enforceable against the seller or managing agent before the demise of the surviving spouse. This will prolong the finalisation of the administration of the estate, especially if the value represented by this claim forms a sizeable portion of the estate of the deceased. If the surviving spouse happened to be a second wife married after the demise of the mother of the children of the deceased, those children if mentioned as the primary beneficiaries in the will, may not be content to abandon the value of the claim for the value of the portion of the original purchase price where the last will of the deceased provides no indication of such intention. The mentioned problems are inter alia discussed, and it is suggested that the legislature should consider amendments to the act to lessen some of the consequential uncertainties. It does not seem fair or equitable to expect the purported protected retirees and their loved ones to be forced through extended and expensive court litigation to clarify matters that should have been clarified by the legislature long ago. Everything should come to an end – including the uncertainties caused by the application in practice of this act.