Page 35 - Litigating Land and Housing in South Africa: Lessons and Reflections

The Brusson Scheme
4 3
2
LITIGATING LAND AND AND AND HOUSING IN IN IN SOUTH AFRICA  LESSONS AND AND AND REFLECTIONS
35
blacklisted individuals who could not get credit through banks There was one requirement to qualify for a a a a a a a a loan from Brusson: ownership of immovable property People who responded to the the advertisements for the the loans from Brusson Finance were were faxed several docu- ments ments to to to fill in in in and sign Many people were were were told that these documents documents were were merely to to to determine their eligi- bility for a a a loan Some people signed the the the documents documents in in person in in circumstances where Brusson employees
would rush them though through the the documents documents whilst obscuring key headings The documents documents were in in in fact: a a a a a a a a a questionnaire an an an offer to purchase a a a a a a a a a a a a deed of of of sale and and a a a a a a a a a a a a a memorandum of of of agreement The documents were not explained to to the the people and and those that asked questions were pressured to to act fast or their loans would not be processed In this way Brusson caught even astute homeowners off-guard So how did the Brusson Scheme
work?
The Brusson scheme operated as follows:
When a homeowner signed the Brusson documents they would – – unbeknownst to them – – sell their property to to to an “investor” “investor” An “investor” “investor” would be a a a third party who Brusson would offer an investment opportunity to to This “investment opportunity” was that the investor would use their good credit rating and reputation to get a a a a a a a a loan from a a a a a a a a bank secured against the home that was about to to be transferred into their name The loan would be paid to to to Brusson not to to to the the investor In return the the investor would receive monthly payments At no point would would the investor need to to pay anything Brusson would would then loan loan the the the money raised by the the the investor’s bank loan loan to the the homeowner who was usually none-the-wiser that they had signed away the the the ownership of their home Who were the investors?
Some investors alleged that they had no no knowledge of the the details of the the Brusson scheme and were not advised about the the circumstances of the the Brusson clients The investor and client never met during the transaction Brusson advertised a a a passive income investment to the the the investors who signed the the the documents believing they were getting money for nothing BANK
BRUSSON HOME OWNERS
1 LOAN INVESTOR