Villa buyers in Zanzibar project allege breach of contract

Dar es Salaam. Buyers of villas constructed by property developer Floton Africa in Paje are seeking intervention from the authorities in Zanzibar, claiming the developer has failed to deliver as per the agreements they entered into.

In a letter dated August 15, addressed to the Zanzibar Investment Promotion Authority (ZIPA), a group of buyers from Phase 2 has requested the authority’s assistance after the contractual delivery period for the villas expired.

The buyers allege that the developer has breached its contractual obligations and failed to fulfill its promises. The buyers claim they have made payments of up to, and in some cases exceeding, 20 percent of the respective prices, which ranged from $165,000 to $230,000.

“Clause 6.1 of the agreements mandates that the Developer hand over possession of the villas to the buyers within 10 months. However, site visits conducted by the buyers have revealed that the developer has yet to complete the foundation work,” reads part of the letter.

But speaking to The Citizen, the Managing Director of Floton Africa, Mr Raveendran Jayaram, stated that the registration of the condominium is nearly complete and that it will be finalized shortly.

 “As far as the registration of the condominium for the first phase of the project is concerned, we have already received the control number, and we will soon deposit the fees,” said Mr Jayaram.

He explained that the delays in completing and delivering the units in the second phase were due to the late granting of the building permit by ZIPA.

“We lodged the application for the building permit for Phase 2 on November 29, 2023 and construction commenced on February 26 after receiving the permit. The authorities are aware of this. There was no way we could have delivered in such a short period,” he said.

Mr Jayaram clarified that the 10-month timeline begins from the date of construction commencement, not from the date of payment.

He also noted that the three months following the start of Phase 2 construction coincided with the rainy season and emphasized that they have consistently shared progress reports with the buyers.

However, the investors, who purchased various villas within the project, assert that the developer has not only missed the stipulated deadlines for project completion but may also have diverted funds intended for Phase 2 to rectify defects in Phase 1. This has raised serious concerns about the developer’s financial capacity and its ability to complete the project.

The investors have requested ZIPA to conduct a thorough investigation into the developer’s activities, including its financial status, adherence to project timelines, and compliance with the terms of its investment certificate.

“We urge you to exercise your statutory powers under Section 7(d) of the Zanzibar Investment Act No. 10 of 2023 to initiate a comprehensive investigation into Floton Africa Company Limited, specifically to ascertain whether the developer possesses the financial capacity to meet its contractual obligations by September 2, 2024, without compromising safety and quality standards,” the letter states.

Furthermore, they ask the authority to determine whether the developer has diverted funds from Phase 2 buyers to address defects in Phase 1, thereby impairing its ability to complete Phase 2 in a timely and satisfactory manner.

Additionally, they are calling for an order compelling the developer to refund their payments due to the significant delays and uncertainties surrounding the project.

Condominium registration

In a second letter dated August 27, which The Citizen has reviewed, unit owners addressed the Zanzibar Condominium Board through their lawyer, outlining a series of grievances stemming from the developer’s failure to complete the necessary registration processes.

They argue that this inaction has left them in a precarious legal and financial position, unable to establish ownership of their units or access essential services. According to the owners, the project was marketed and sold with the promise of proper legal titles for each unit.

However, despite registering the condominium plan, the developer has neglected to register individual units, denying owners the crucial certificates of title. This oversight has far-reaching consequences.