You could get these Joburg apartment blocks cheap – complete with illegal tenants
- Hundreds of hijacked buildings dot the streets of downtown Johannesburg, overtaken by unscrupulous slumlords through violence and intimidation.
- Some of these buildings can be picked up for a bargain at auction.
- Like the apartment blocks at 98 and 102 Becker Street in Bellevue, known as Queens Castle and Prince Castle respectively.
- These properties will be auctioned on 4 November, with bids starting at R500,000 each.
- The highest bidder will need to figure out how to get the illegal tenants occupying both buildings to pay or to leave.
- For more stories go to www.BusinessInsider.co.za.
Two apartment blocks in the Johannesburg suburb of Bellevue are going to auction with a minimum bid of R500,000 each. Picking them up at this price will be a bargain, but both buildings are fully occupied by non-paying tenants.
There are more than 500 problem buildings in Johannesburg, according to a last count in 2018. Many of these are classified as hijacked, whereby slumlords impose themselves as rightful owners of a property – usually through intimidation and violence – collecting rent and acting as body corporates.
The legal owners face an uphill battle in confronting the hijackers and evicting illegal tenants. These tenants pay rent to the slumlords at a largely reduced fee, as municipal bills, taxes, and utilities are charged to the legal owners.
This phenomenon is especially prevalent in the areas surrounding Johannesburg’s CBD. Multistorey residential buildings in Hillbrow, Yeoville, Berea, and Bellevue have fallen victim to hijackers. Tenants in these flats live in deplorable conditions, with slumlords pocketing rentals and showing little concern for upkeep. Running water and electricity is scarce.
The buildings at 98 and 102 Becker Street in Bellevue – known as Queens Castle and Prince Castle respectively – were hijacked many years ago. Their exasperated legal owners have turned to an auction house to rid themselves of the problem properties and recoup some money.
Each block has ten apartments and additional rooms on the rooftops. Both properties are around 1,050 square metres each in size. The properties are advertised as having “huge upside” which refers to the potential of these buildings increasing in value.
This potential is tied to the rejuvenation of downtown Johannesburg. And Bellevue, with its low-rise residential flats, neighbourhood shopping centres, and single residential properties, well located on main arterial roads, is attracting gutsy developers.
“If you look within the Joburg CBD there’s obviously a lot of buildings that are dealing with non-paying tenants,” Guy Dowding of High Street Auctions, the firm handling the auction of Queens Castle and Prince Castle on 4 November, told Business Insider South Africa.
“[There is opportunity] if you have the necessary skills to transact in this atmosphere. I don’t think it’s for everyone and it will take a certain skillset or knowhow to work.”
This opportunity is supported by other property prices in the area. A one-bedroom apartment two roads down from the Becker Street is currently on sale for R215,000, while a unit on the same street as Queens Castle and Prince Castle sold for almost R200,000 earlier this year.
“We’re opening the bidding at R500,000… I expect it to fetch a little over R1 million but that’s still a good deal at that kind of price, once you get the tenants to pay. There are fairly big rooms, there’s only ten flats per block, a mixture of single [and] double bedrooms,” said Dowding, adding that vacant plots of land in the area have recently sold for similar prices.
And while the “eviction of the occupants must be done at the purchaser’s cost,” all outstanding municipal accounts will be settled by the seller.
Tenants, with or without valid lease agreements, are still protected, to a certain extent, by the Constitution and Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (19 of 1998).
This requires the rightful property owner to give the occupier notice of the intention to obtain an eviction order at court. Illegal tenants, those who do not have the owner’s permission to occupy the premises – defined by the Act as “unlawful occupiers” – are entitled to defend themselves against the eviction in court.
The court will then decide if the defence brought by the unlawful occupier is valid, with serious consideration given to the rights and needs of the elderly, children, disabled persons, and households headed by women.
“It [the buildings] has been hijacked for a very long time. The sellers aren’t based in Johannesburg [but] they’ve tried various things, not so much to evict them, but they did cancel the meters, get [the City of] Joburg involved,” said Dowding of the owner’s unsuccessful efforts to reclaim the properties.
“They tried to do it the legal [way] but they don’t have the knowhow or the skills, and are not based here, to actually drive this kind of application. I think that’s where they fell short to some degree.”
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