Bo-Kaap residents accuse City of fraud

Bo-Kaap residents have lodged a complaint of fraud against the City.

A fraud complaint was lodged against the City of Cape Town by Bo-Kaap residents last week. This comes after residents accused the City of contravening the Municipal Finance Management Act during the sale of St Monica’s Home in Lion Street, Bo-Kaap, to the developer.

Led by community activist, Hanif Loonat, the residents laid a complaint of conspiracy to commit fraud and theft and contravening the Municipal Finance Management Act and the Prevention and Combating of Corrupt Activities Act at the Cape Town Central police station.

Mr Loonat said he was standing with the Bo-Kaap community in their fight against gentrification which he said was going to kill a heritage that was close to the hearts of the people of the area.

“Thousands of tourists have come to see and experience our way of life. A life full of colour, fun, patience and tolerance. A life which is fast running out and our people have had enough of this City’s immoral and corrupt agenda,” he said.

He said they laid the complaint against the City over itssale of St Monica’s Home (formerly the St Monica’s Maternity Hospital) and the land adjacent to it.

“This is to be developed in the best interest of a few who don’t live in it and at the expense of those who live in it. We will never be fooled into accepting gentrification that benefits no one, but a few unscrupulous, self-enriching and selfish individuals. Let’s unite against those that condemn us to nothing, while we are expected to accept our fate, like lambs to a slaughterhouse,” he said.

On Friday, December 14, Brett Herron, former mayoral member for transport and urban development, wrote to Daily Maverick that he had been contacted by a group of Bo-Kaap residents about the sale of the old St Monica’s Home in the Bo-Kaap to a private developer.

He said the City had transferred the property to the St Monica’s Trust decades ago, with a title deed restriction that should the home stop operating, the property would revert to the City.

He said: “The home did stop operating, but the property did not revert to the City. Instead, someone in the City agreed to abandon the reversionary clause in return for payment of about R14 million,” he alleged.

Mr Herron said he was alerted to this alleged transaction in late 2017. “I tried in vain to get a coherent answer about how this had happened. Clearly, a site like that should have been used to provide critical affordable housing in the Bo-Kaap. I never received a plausible explanation for this secret deal,” he said.

Asked to responmd to the allegation that the City is alleged to have unlawfully benefited from the R14 million sale of the St Monica’s Home in the Bo-Kaap, the City said: “During 1946, the then municipality of the City of Cape Town disposed of Erf 2969 Cape Town to the trustees, for the time being, of the St Monica’s Home subject to a reversionary clause that read: ‘That in the event of the ground not being utilised for the purpose of the St Monica’s Home, payment shall be made to the Council of the City of Cape Town of a purchase price of two thousand two hundred and fifty (2 250) pounds being the estimated value of the land at the date of sale (September 4, 1946).

“A further land sales transaction between the City and St Monica’s was concluded during 1990, whereby the City sold Erf 2970 to the trustees, for the time being, of the St Monica’s Hospital, also subject to a reversionary clause that read as follows: ‘The property shall be used for hospital purposes only and in the event of the land or any buildings erected thereon ceasing at any time to be used for hospital purposes the property shall revert to the municipality of the City of Cape Town against payment to the transfer of R10. The cost of such retransfer shall be borne by the transferee’.

“After the hospital closed down during the 1990s, and with the approval of the hospital board, Age-in-Action (a new NPO) was formed to manage the shelter. The vision for St Monica’s Centre was for it to become a shelter for older persons and achieve autonomy, which was accomplished in 2005. Thereafter, the affiliation to Age-in-Action was dissolved.

“The St Monica’s Shelter for Older Persons has been a registered NPO since 2009. Attorneys acting on behalf of the shelter requested the removal of a restrictive title condition (reversionary claim) registered respectively against the title deeds of erven 2969 and 2970 Cape Town.

“The organisation has reported it is under threat due to the excessive maintenance costs, sub-standard living conditions and is constantly turning people away due to it running at capacity. The shelter proposed that the only solution to its survival was to sell the two properties. But the restrictive title conditions prevented the on-sale of the subject properties, hence the request to remove the restrictive conditions.

“The granting of this application conforms to the provisions of Clause 15.3 of the policy on the management of certain of the City of Cape Town’s immovable property in that the City reserves the right to demand compensation equal to the difference between the actual purchase price and the current fair market value in the event of a property sold by the City.”