{"id":1415,"date":"2022-10-05T10:59:03","date_gmt":"2022-10-05T08:59:03","guid":{"rendered":"https:\/\/www.matthewsenslin.com\/?p=1415"},"modified":"2023-07-04T09:18:39","modified_gmt":"2023-07-04T07:18:39","slug":"building-in-security-estates-the-persuasive-sting-of-penalty-levies","status":"publish","type":"post","link":"https:\/\/www.matthewsenslin.com\/building-in-security-estates-the-persuasive-sting-of-penalty-levies\/","title":{"rendered":"Building in Security Estates: The \u2018Persuasive Sting\u2019 of Penalty Levies"},"content":{"rendered":"\n

“… had the respondent imposed more moderate penalties, it would likely not have had the desired effect, or put differently, the same persuasive sting for individuals of substantial means.\u201d (Extract from judgment below)<\/strong><\/em>.<\/p>\n\n\n\n

Buying \u201cplot and plan\u201d in a residential complex allows you the freedom to build your own dream house in a secure environment, quite apart from providing what is likely to be sound long-term investment. Just make sure that you will actually be ready to build within the time frame required by the HOA (homeowners\u2019 association). If you don\u2019t, you risk having to transfer the plot back to the developer (a costly exercise), or you could be lumbered with penalty levies many times higher than normal levies.<\/p>\n\n\n\n


You can ask a court to reduce the penalty, but\u2026<\/em><\/strong><\/p>\n\n\n\n

Our law gives us general protection from excessive \u201cout of proportion\u201d penalties by means of the Conventional Penalties Act, which in the section headed \u201cReduction of excessive penalty<\/em>\u201d provides that –<\/p>\n\n\n\n

\u201cIf upon the hearing of a claim for a penalty, it appears to the court that such penalty is out of proportion to the prejudice suffered by the creditor by reason of the act or omission in respect of which the penalty was stipulated, the court may reduce the penalty to such extent as it may consider equitable in the circumstances: Provided that in determining the extent of such prejudice the court shall take into consideration not only the creditor’s proprietary interest, but every other rightful interest which may be affected by the act or omission in question.\u201d<\/em><\/p>\n\n\n\n

However, as a recent High Court decision illustrates, you will have your work cut out for you if you want the court to exercise that discretion in regard to penalty levies.<\/p>\n\n\n\n


The \u2018persuasive sting\u2019 of 5x normal penalties<\/em><\/strong>.<\/p>\n\n\n\n