Adprop managers may have stolen millions

Jan 13 2013 14:07
Xolani Mbanjwa, City Press

JJ Schoeman, a resident in the complex Castlerosse in Killarney, is one of hundreds of angry residents around the country who have apparently been misled by property management company Adprop. (Pic: Herman Verwey/City Press) (Herman Verwey)

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Johannesburg - Some property owners whose properties are administered by Adprop Property Management face massive debt after the company was interdicted from operating and its trust accounts frozen amid allegations of financial irregularities.

Property owners in various complexes administered by Adprop have been advised to lodge claims with the curator for the money they paid the company for levies, water, lights, and sewage after Adprop allegedly “misrepresented” the timing and method of payments and the amounts paid to the City of Johannesburg.

The North Gauteng High Court last month granted the Estate Agency Affairs Board, the industry regulator, an interdict against Adprop and its directors, Leslie Inglestone and Milton Zinn, after they were found to have illegally operated as estate agents and property administrators without a Fidelity Fund Certificate for more than five years.

The court has also approved the appointment of Bashir Adams, an independent curator, to ascertain the “whereabouts of monies withdrawn” from trust accounts used by property owners to pay for services such as levies, water, lights, and sewage.

Adams said he was busy working on the case and would only shed light on the number of people affected after next week.

Restraining Adprop from doing business means that bills have not been paid and property owners are being asked to pay for services for which they have already paid.

According to the founding affidavit by the regulator, the San Francisco body corporate, a complex in Johannesburg, lodged a complaint with the board about Adprop “not making payments of the amounts it was allegedly paying to the council” for services.

The San Francisco body corporate alleged that it incurred R23 000 in bank charges between July 2011 and June 2012 because Adprop was not making payments at the times it said it was making the payments, and that “the funds of the San Francisco body corporate are being used to reimburse a credit card... of one of the respondents”.

In court papers, the regulator said it was certain Adprop would not be able to compensate any claims for damages.

“The harm which the respondents are causing and may cause cannot be compensated for by damages. It is also highly unlikely that the respondents will be able to satisfy any order for damages,” said the regulator.

Jimmy Baloyi, acting executive manager of enforcement for the regulator, said they have started an internal disciplinary investigation after receiving numerous allegations of improper conduct against Adprop and its directors.

Baloyi said operating without a Fidelity Fund Certificate was a serious offence which carried a fine of up to R25 000.

Since the debacle came to light last month, many properties now face massive debts. They will have to pay services they thought they had already paid, through Adprop.

One such complex is Castlerosse, also in Johannesburg. The body corporate alleges Adprop “swallowed” their hard-earned money, with no explanation for where the money had gone.

Adele Asher, chairperson of the Castlerosse body corporate, said a member of the body corporate happened to overhear a conversation at a retail food store about Adprop’s woes and hurried to warn other property owners not to pay for services into the Adprop account but rather to put the money into their own trust accounts.

“I had a sneaky feeling about money not being paid to the municipality, as we had been cut off three times for allegedly not paying our electricity.

"When calling Adprop they always assured us they had just put in a cheque but, on investigating, a larger amount was being demanded by the municipality,” said Asher.

Castlerosse property owners only discovered this week that they owe the City of Johannesburg R237 000 in electricity fees.

“I don’t know how much we owe for water. We will have to enter into a debtor’s arrangement with them to pay it off monthly and still find the money for current charges. Many buildings are worse off – owing millions.

"One building doesn’t even run a cheque account and left R875 000 with Adprop. A neighbouring building owes over a million rand as far as the municipality is concerned,” said Asher, who has had sleepless nights over the funds paid over to Adprop.

She said property owners who are owed money by Adprop have been asked to make individual claims to the curator.

“We are all looking for new, reliable property management agents, as we still need to pay wages, security, insurance, lights and water,” said Asher.

JJ Schoeman, a well-known fashion designer and property owner at Castlerosse, recounted how he had been mistreated by Adprop since he bought his property 12 years ago.

“Whenever we paid later than seven days from the beginning of the month, a letter would be sent to us from Adprop, charged at R115 for the letter, plus interest on the full amount, plus another letter threatening that a lawsuit would follow if it was not immediately settled,” said Schoeman, who is glad he will not be dealing with Adprop again.

However, most of the damage has already been done.

“I would always call them if I had a problem to settle all the amounts, plus interest, plus attorneys’ charges, plus the letter charges and other charges.

“The levy bill would have an entry called ‘legal charges’ that ranged from R365 to R3 850 per month.

“There were so many problems and charges two years ago that my levy bill went to a staggering R50 000,” said Schoeman, adding that Adprop once sent a sheriff to attach his furniture even though his account was up to date.

In December, Schoeman decided to overpay his levies to Adprop even though he was three months ahead with his monthly payments, but was soon notified by the body corporate that Adprop was undergoing curatorship and that there was no certainty he would recoup the R11 000 in credit he had paid over to Adprop.

Adprop and Inglestone had not responded to requests for comment at the time of going to print.

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property  |  fraud



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