Harare City Council to protect home-seekers
THE Harare City Council is finalising an arrangement under which all payments by home-seekers in various housing co-operatives would be made through a local commercial bank to ensure that funds are used for intended purposes.
The move is meant to safeguard home-seekers from being fleeced by rogue co-operative officials and land barons as well as speed up developments at housing projects.
Harare city spokesperson, Michael Chideme, told the Financial Gazette’s Companies & Markets last week that the local authority was in the process of structuring a deal with CBZ Bank which would protect home-seekers in the capital from wanton abuse by co-operative officials and land barons.
“We are putting final touches to it (the arrangement) now and very soon it will not be easy for co-operative officials to use member contributions on things that are not related to housing developments,” Chideme said.
He added: “The arrangement would also make it possible for housing co-operatives to get funding for their projects on the basis of their projected income and this would help speed up development.”
Chideme said under the arrangement — which would be mandatory for all housing co-operatives that are recognised by the City of Harare — no payments would be made at any co-operative offices or to any officials, but to CBZ Bank which would in turn work with the respective co-operatives, the city and the ministry of Local Government and National Housing to ensure that funds were used strictly for purposes related to delivery of houses to members.
CBZ Bank — Zimbabwe’s largest bank by deposits — was strategically chosen for the partnership because it has internal expertise as it has a mortgage and property development arm.
It is not unusual for co-operative officials, most of who boast of political connections, to divert members’ contributions to personal use.
Under this arrangement, which would make it easy for home-seekers to tell genuine housing co-operatives from bogus ones, all financial transactions would be done via the bank and based on the financial prospects of each co-operative or consortium of co-operatives.
The bank would be able to make advance payments for specific projects, which payment would be recovered as members made their contributions.
Chideme explained: “Suppose it was going to take five years for a housing co-operative to raise say US$5 million that is required to develop a road and sewer network on a certain land made available by the city council, the bank would be able to get a contractor to do this work and after council officials have approved that the work has been done to required standards, the contractor would be paid and later the bank will recover its money from contributions by members of the co-operative.
So instead of waiting for five years to get the land serviced, it would be done in a shorter period. It would be like them getting block mortgage from the bank.”
He also said apart from stemming financial mismanagement as well as speeding development, the arrangement would give home-seekers security of tenure unlike the current situation where a home-seeker joins or gets expelled from a co-operative at the whim of co-operative officials.
All bona fide co-operatives would be required to submit names of their members to council, which in turn would pass these to CBZ Bank and these are the people who would be required to pay their contributions to the bank.
Chideme said the other advantage of the arrangement was that it gave a fall-back position in the event of any problems as the home-seekers would be able to approach the city council, the bank as well as the Ministry of Local Government for redress, unlike the current situation where what goes on at a co-operative starts and ends with the word of the powerful co-operative chairpersons and officials under them.
Chideme said members of co-operatives in Caledonia have already been asked to stop making any payments to their respective co-operatives until the new watertight arrangement has been put in place.
He said when this arrangement is in place, anyone who is asked to pay for land in Harare outside this facility would certainly be dealing with criminals.
Desperate home seekers lose millions of dollars every year to bogus housing co-operatives and criminals that operate as land barons.