• The Kaplan Team

THOUGHT OF THE WEEK It's my life right?

Retirement Villages are trending on the property front and potential Life Right Holders are spoilt for choice when it comes to choosing where to settle down for their retirement. 

The property can be registered as a housing scheme for retired persons in terms of The Housing Development Schemes for Retired Persons Act 65 of 1988 (“HDSRP Act”),  as a Sectional Title scheme in terms of the Section Title Act, Act 95 of 1986 or as a share block in terms of the Share Blocks Control Act 59 of 1980.  If you are buying a Life Right in a Retirement Village, the development scheme would have been registered as such and the Life Right Agreement will be, inter alia, subject to the HDSRP Act. 

Despite its brief appearance, the HDSRP Act confers several powers and duties pertaining to the alienation of Housing Interests to the elderly. This article serves to assist you in your journey as a retired person, 50 years of age or older, wishing to acquire a Life Right in a Housing Development Scheme, as defined in the HDSRP Act. 


Buying a housing interest “off-plan”?

Section 6(1)(a) of the HDSRP Act restricts a developer to receive any consideration unless an architect or quantity surveyor has issued a certificate confirming that the housing development scheme has been erected substantially in accordance with any applicable officially approved building plans.


The Act does not prohibit or restrict the alienation of housing interests in housing development schemes which have not yet been completed. In principle, therefore, housing interests can be sold “off-plan”. 


Section 4C of the HDSRP Act prohibits the alienation of a right of occupation in relation to a housing interest unless the title deed of the land concerned to which the right relates, has been endorsed by a Registrar of Deeds, to the effect that such land is subject to a housing development scheme.


A “proposed” housing interest can be described as an interest in a housing development which has not yet been erected substantially in accordance with an approved building plan or which is not sufficiently completed for purposes of utilization of the housing interest concerned and therefore it is not an alienation of a right of occupation. 


However, a developer must, in the contract of sale entered into with a retired person, specify the latest date on which he will furnish the retired person with:


A certificate issued by an architect or quantity surveyor stating that the building has been erected in accordance with the approved building plans and has been sufficiently completed for purposes of utilization of the housing interest; A certificate issued by a Practitioner confirming that the title deed of the land to which the right of occupation relates has been endorsed as contemplated in Section 4C of the HDSRP Act.

This date may not be later than two years from the date of conclusion of the contract.



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