Property developer wants N$48m from First Capital

A Developer involved in a 300-house project at Grootfontein claims First Capital Property Managers has deducted nearly N$48 million in alleged unlawful project management fees from clients.

Tulaing Properties, now trading as Siren Partners Realtors and owned by businessman Joseph Andreas, filed High Court documents on 29 January, claiming it entered into an exclusive written agreement with First Capital Property Managers on 26 August 2021.

The agreement allegedly granted the property management company exclusive rights to market plots at Grootfontein extensions seven, eight and nine in exchange for a commission of 2.5% on plot sales.

Tulaing further alleges that the agreement designated Tulaing Properties as one of six preferred developers for the construction of houses on the plots.

However, the company contends that the contract stipulated that First Capital Property Managers would not be entitled to charge project management fees if it chose to engage developers other than Tulaing Properties.

Court papers state that First Capital Property Managers allegedly appointed and supervised several contractors, including V-Tino Trading CC, Zhi-Hua Construction CC, Hakahama Trading CC, Lupine Trading CC and Sydney Engineering CC, to carry out construction work on the properties.

Tulaing Properties claims that despite using alternative developers, First Capital Property Managers proceeded to charge and retain additional fees from purchasers’ home loan accounts during the construction process.

The disputed charges allegedly appeared under descriptions such as “provisional management fees, other payments included in the progress payment”.

As an example, the plaintiff points to a loan account statement relating to erf 1812 at Grootfontein extension seven, where First Capital Property Managers allegedly charged N$70 000 in provisional management fees and a further N$93 810 is recorded as ‘other payments’.

The developer alleges that similar deductions may have been made across approximately 293 housing projects managed by the defendant.

It argues that the financial records relating to the remaining projects are solely in the possession of First Capital Property Managers, making it impossible to determine the exact amount allegedly withheld.

Using figures from the cited transaction as a basis for calculation, Tulaing Properties estimates its total claim at N$48 million.

The company is asking the High Court to compel First Capital Property Managers to provide a full statement of account, supported by vouchers and source documents, for all 293 housing projects.

Alternatively, it seeks payment of the estimated N$48 million, together with interest at 20% per annum from 10 August 2023 and legal costs.

According to the court documents, letters of demand were allegedly sent to First Capital Property Managers in August 2023 and January 2024, but the dispute remained unresolved.

Meanwhile, the matter has progressed through the court’s case management process.

In an order issued following a case management conference held on 19 May, the High Court condoned the plaintiff’s failure to file its replication within the previously prescribed time period.

The court directed the parties to exchange witness statements and expert reports by June and to file discovery affidavits and exchange bundles of documents by 30 June.

Legal representatives for both parties have also been ordered to hold a pre-trial conference on or before 10 July and to submit a draft pre-trial order by 17 July.

The matter has been postponed to 23 July for a pre-trial conference hearing, where the parties’ legal practitioners will be required to appear before the court and address outstanding issues ahead of trial.

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المصدر: The Namibian