The legal battle lines are drawn between a jobless widow, Erica Schroeder, her unemployed children, and the developers of a retirement village who have rejected their claim of the estate of her ex-husband, Carl Schroeder, after he bought a life right in a retirement village and passed away just four months after taking possession.
Schroeder bought a life right in the Ryn Village Retirement Estate in Benoni in 2023.
He passed away four months later. The main beneficiary in his will is Erica, his ex-wife, on whom their two adult children are dependent. Their son has been unemployed for six years and their daughter has a psychiatric condition that makes it almost impossible for her to work. Erica was fired during the pandemic from the company for whom she had worked for 21 years.
Mr. Schroeder had paid a substantial portion of his salary to Erica to assist with her and the children’s needs until his sudden death at age 63. Mr. Schroeder’s will does not deal with the residue of his estate and his and Erica’s two adult children are the heirs to the residue.
According to Trudie Broekmann, a leading South African attorney specialising in consumer law, Erica is aggrieved as Ryn Village (Pty) Ltd is unwilling to refund any part of the R1.625 million to Carl’s deceased estate. She has asked Broekmann to assist her in getting a refund of most of the money.
If her ex-husband had used the money to buy a house instead of a life right, Erica and Carl’s children, who are his intestate heirs, would have inherited the house. Many life rights contracts also allow for the purchase price to be refunded to the estate when the occupiers die, some also sharing a percentage of the profit on re-sale of the unit with the estate, but that was not the case with the option Carl Schroeder chose at Ryn Village.
“The developer of the retirement village is laughing all the way to the bank, because they can resell the life right for that same house during the same year for another R1.6 million,” says Broekmann.
The attorney acting for Ryn Village (Pty) Ltd. states that according to the sale agreement the estate of the late Carl Schroeder does not have any claim against Ryn Village for a refund of any portion of the purchase price. They state that the life right will terminate automatically upon the death of the occupier.
“Because of the occupier’s death, the occupier’s estate shall have no right and therefore no claim whatsoever against Ryn Village whether for a refund of the purchase price or any portion thereof,” the sale agreement states.
“Not so fast,” says Broekmann.
She says life rights are regulated by the Housing Development Schemes for Retired Persons Act 65 of 1988 (“HDSA”). The contract does not comply with the Act, so it is possibly invalid. “In that case, all the money should be paid back to the estate,” Broekmann says.
“The transaction also breaches the requirement in the Consumer Protection Act that requires the price you pay must be fair, reasonable and just.
“Paying R1.625 million for four and a half months’ accommodation is not a reasonable price-if you take into account the levies Mr. Schroeder also paid to Ryn Village it’s the equivalent of paying rent of R360 000 per month for a 2-bedroom house in Benoni,” Broekmann says.
“The estate agent, Elize Coulter of Pam Golding Properties, Benoni, who marketed the life right to Mr. Schroeder, and the developer’s website describe the life right as “affordable” and talk about “savings that can be put in your bank account” when you buy a life right rather than a property.
“They also state that ‘You have all the advantages of ownership.” In Mr. Schroeder’s case, nothing could be further from the truth. Our firm is consequently assisting the Schroeders to obtain a refund from the developer, and we are also holding the estate agent liable based on fraudulent misrepresentation,” Broekmann said.
“We believe there are many retired people in South Africa who are in the same boat – they pay a vast sum for a life right without a refund right, but if they die soon after, their family will really lose out. Where the older persons live in the life right unit for a long period again, their families suffer if the developer doesn’t share the increase in value of the property with the estate, even where the capital sum is refunded.”
“As far as we can tell we are the first law firm to discover that we can challenge this unlawful practice,” Broekmann added.
Press release compiled by Fanie Heyns on behalf of Trudie Broekmann Attorneys. For more information, contact Trudie Broekmann on (082) 3229124 or contact the office on 021-4220269.