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Cash-strapped home owners fell for property scam

A man acting as an estate agent lured two parishioners from the church he attended in the late 1990s into a property scam, the Western Cape High Court has heard.

The couple, identified as the Hagans, were allegedly offered sums of R10 000 to R15 000 per property transaction that they participated in. According to the evidence before the court, Marshall Skei told the Hagans he was an estate agent who helped people who had fallen on hard times. He told them he helped people in debt by selling their houses and giving them eight months to buy back the property once the debt had been settled. The parishioners would act as investors and buy the properties with bonds secured from major banks.

The couple bought five properties and two of them – one in Eerste River and one in Macassar – formed the subject of a judgment by a full Bench of the High Court. The Eerste River house belonged to William Mottel and his wife Betta, and the Macassar house belonged to Calvin and Juliana April. Both couples fell into arrears with their bills and decided, unbeknown to each other, to respond to an advertisement which included contact details for Skei.

The advert offered to help people who could not cope with debt. The couples met separately with Skei, who was the sole proprietor of a company called Altmarr Properties. Skei, who was not a registered debt counsellor, instructed them to go to a firm of attorneys, where they were given documents to sign. The Mottels and Aprils claimed the papers, which were headed "rehabilitation of financial credibility", were never explained to them.


However, they said they had not realised they were selling their homes to the couple Skei had recruited at church, with the option of buying back the property within eight months after the debt had been squared. In terms of the agreements, the proceeds of the sale would go to Skei – a fact they claimed was never brought to their attention. Skei claimed the money was paid to him so that he could settle their debt. The Aprils only realised their house had been sold when they found a muncipal account in their post box, which had the Mottels' address on it and was addressed to someone else.

They visited the Mottels, whom they had not met, and realised that they had been victims of a fraudulent scheme. The two couples argued that the agreements were unlawful, saying that they were induced by misrepresentations that Skei was a debt counsellor and their properties would not be sold. But the Hagans disputed this, saying the couples were aware that their properties were being sold. In addition, they argued the payment to Skei was allowed because he acted as an estate agent. It was their argument the agreements were valid.

In a judgment earlier this month, Judge Nathan Erasmus said: "Both (the Mottels and Aprils) had very little knowledge regarding business transactions." He said it was apparent they never intended to sell their properties and had nowhere to go. "These transactions would clearly render them homesless," he said, adding that they had agreed to terms that were "extremely disadvantageous". He described the position the couples were in as one which "offends against public policy and is irreconcilable with notions of fairness and justice". He set aside the sale agreements as void and ordered the Registrar of Deeds to make the necessary changes. He also ordered that the original bonds be reinstated. The couples were granted leave to approach the court for judgment for the sum to which the others has been unjustly enriched. Judge Erasmus directed that the judgment be transmitted to the Cape Law Society, the Estate Agency Affairs Board and the National Credit Regulator. Judges James Yekiso and Vincent Saldanha agreed.

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