The Gauteng High Court, Pretoria, has provisionally liquidated three construction companies – known as House Zero – which falsely represented to prospective homeowners that they could deliver modular type homes within 12 weeks.
Two prospective buyers, Nadia Fourie and Leon Bosman, who between them paid more than R8 million to the companies for the homes they still do not have, took the matter to the court. They are just two of many “victims” who claim to have been scammed.
Judge Tshifhiwa Maumela placed Housezero Construction Pty (Ltd), Housezero Commercial Pty, as well as Compliance Management Services Pty, under provisional liquidation.
The applicants, together with others, claimed they fell victim to the unscrupulous business practices of these companies which falsely represented to them and various unsuspecting members of the public, that they could deliver the houses within a 12-week period.
Prospective purchasers were led to believe the houses were completed; therefore payment of the purchase price had to be made. But after payment, the houses were not delivered.
A Carte Blanche expose aired in November last year, showed one of the directors of these companies trying to sell a house to an undercover journalist.
The applicants in the liquidation matter said more worrisome was that while their application was still pending, the companies continued to offer their services to the public knowing full well that they could not deliver.
“House Zero continued unabated to trade and portrayed a false narrative in spite of the pending litigation.”
They said the matter was urgent as it was in the public interest to provisionally liquidate the companies to prevent them from trading any further.
The two applicants said the owners of House Zero solicited payments from them under false pretences amounting to R8 638 279.63. According to them, House Zero is unable to refund them.
Fourie and Bosman were not the only ones who lost their money. The court heard the companies followed the same modus operandi and “sourced” large amounts of money from other clients but failed to deliver the houses.
Both Fourie and Bosman demanded their money back from the companies which were unable to pay. In one instance the directors promised to complete one of the houses and then sell it to generate money to pay them back.
They said it was clear that House Zero was insolvent and not intended to run a bona fide construction company which rendered the services it promises.
In Bosman’s case, he had paid millions and was promised he would have his home in March 2020, but it is still incomplete. In respect of another home buyer, Robin Knox Grant, it was agreed that the project would run on a discounted upfront payment for an expedited completion date starting from February 2020. He terminated the contracts and to date, his modular home remains a derelict building site.
Another unsuspecting member of the public, Elize Botha, was in November 2019 told her home would be ready within 14 weeks. By the time of the liquidation application, the contractors had only delivered cement and steel railings.
The complainants said the respondents continued to “guarantee” delivery of the homes subject to further payments from their side to the contractors.
The respondents did not dispute that the homes of the applicants were not yet complete, but cited “manufacturing difficulties” as an excuse.
The judge said the respondents did not issue a reasonable explanation to the court. While they were clearly not in a financial position to perform as promised, they were still trading and inducing the public to do business with them. That poses a risk against the public.”
Pretoria News