Do not lease or sell your state subsidised home

I am deeply concerned at the increased reports from various stakeholders about residents who have received a fully subsidized home from Government, who have either rented or sold the property. This information tells us that there was never a need for a home, which means Government is being defrauded.

In fact, I regard the action of anyone that embarks on this route as unethical, as they’re denying one of the almost 600-thousand people that are currently on the Western Cape Housing Demand Database (HDD), a housing opportunity, and their families who in the future could benefit from this asset.

A fully subsidized house costs the state close to R500 000.

Between May and the end of June 2020, we’ve received 11 official complaints about houses in Forest Village, Delft, Blue Downs, Eersteriver, Langeberg Municipality and Beaufort West Municipality either being rented or which might have been sold. In one report, a couple in Forest Village is being accused of currently renting two properties. This excludes the informal reports that’s being highlighted on social media.

The law is clear that every South African citizen who receives a government housing subsidy when buying or receiving a property, will be subject to a pre-emptive condition in their Title Deed, meaning the individual cannot sell the property within the prescribed 8 -years of receiving the subsidized house, unless it has received permission from the Provincial Department of Human Settlements to do so.

For the sale to occur, the beneficiary needs to submit an application to the Provincial Department to have the pre-emptive clause waived and removed from the title deed.

It is further critical to note that the property can be sold when:

• Beneficiaries, who wish to improve their dwellings, need to apply for funding at a financial institution, and need to register a mortgage bond over the property.
• Beneficiaries need to relocate (proof will be requested) to a better area or another city/town.
• Loss of employment, they often take up employment in locations that make daily commuting impossible and the only alternative is to relocate permanently to the new place of employment.
• Beneficiaries find themselves and their family’s victims of crime.

It is further important to note that Approval will be on condition that:

• The purchaser is a SA citizen;
• The purchaser is competent to contract;
• The purchaser does not own and has never owned fixed property before;
• The seller lived on the property for at least 2 years after the effective date of sale
• The seller must be improving on his/her current living standards, or prove that it is a matter of extreme detriment to the applicant, if not approved
• The municipality supports the sale if the property is being sold within the first 5 years of the effective date of sale.

My department is currently investigating all the reports and pursuant to the conclusion of the investigation the necessary and relevant action will be taken. I’ve also requested a legal opinion on the steps that can specifically be instituted against those who are renting their properties. 

We will not hesitate to act against those who have defrauded the State in this manner. I’d like to call on all state beneficiaries not to be tempted to engage in this unethical and quite frankly illegal practices, particularly since the state has ensured that your housing need, which you declared is being met.

I also encourage those who are aware of a beneficiary that’s involved in these practices to formally inform the Department so that an investigation can be launched.

As the Western Cape Government, we remain committed to accelerating human settlement delivery, while promoting social inclusion through the development of integrated, resilient, safe and sustainable human settlements in an open opportunity society.