The Harare City Council has been ordered to stop any more demolitions in Eyrestone Farm south of the capital and pay compensation for houses destroyed late last year.
High Court Judge Edith Mushore ruled that the local authority had acted outside the law when it demolished people's homes in the area without a court order.
The victims of the demolitions were represented by a consortium known as the Harare South Housing Apex Cooperative Society Limited.
"The demolition of the Applicant's members' homes in Eyrestone Farm by the Respondent in the absence of a court order is and hereby declared unlawful.
"Respondent be and is hereby interdicted from further demolitions of applicant's members' homes and eviction of the applicants and its members from Eyrestone Farm, Harare pending finalization of the claim under case number 11117/16," Justice Mushore ruled.
Council moved in last November and destroyed hundreds of homes leaving women and children exposed to the weather elements before a court battle ensued which is yet to be concluded.
But the interim order granted by Mushore will go a long way in emboldening the residents resolve to re-establish their homes and demand compensation from the council.
Ruled Mushore: "Responded be and is hereby ordered to provide adequate restitution to the applicant for the destruction of its members' homes at a scale to be determined by an independent valuer chosen from High Court certified estate agents."
The local authority was also ordered to respect a partnership agreement between the applicant and the Ministry of Local Government inked in August 2012.
Harare has been arguing the residents had occupied the land illegally and was hampering its efforts to establish a planned settlement.