Ruthless rules leave us homeless
For more than 20 years, thousands of working people across the social spectrum have been made homeless and effectively robbed of probably more than R60 billion. These are men and women who, through being retrenched, falling ill or becoming injured, have been unable to maintain their bond repayments.
The issue is particularly poignant now with the continuing rise in unemployment and reports of brutal evictions carried out by the notorious Red Ants. It is a tragic reality that extends from small, two-room township houses to the three-bedroomed bungalows of middle class suburbia and beyond.
These are “sales in execution”, where a sheriff auctions off houses without any reserve price, during which some houses are sold for as little as R100.
Because there is no reserve, bidding, even for a house valued at R1 million, can start at as low as R10. This is an open invitation to corruption that can involve collusion between sheriffs, lawyers and estate agents.
Although all such sales are supposed to be advertised, some may not have been, and others are perhaps given little prominence.
King Sibiya of the Johannesburg-based Lungelo Lethu Human Rights Foundation says: “There are cases where there was only one bidder and a house was sold for R100, and resold within a week for R25 000.”
Scottish-born advocate Douglas Shaw of Banklawadvisor agrees that such incidents are relatively commonplace.
“And they affect people right across South African society,” he says.
Shaw caused a minor stir last year when he highlighted this travesty by publishing international comparisons of such sales that he had gleaned as part of a PhD project. South Africa, he pointed out, had “the worst record in the world” for the sales of homes of people in debt.
Belatedly, the labour movement, the SA Communist Party and senior figures in the justice department seem to have agreed that this “broken system” must be scrapped; that, at the very least, if the house of an indebted homeowner is sold, it should be for close to market value.
This is the system in countries such as Britain. In Ghana, for example, a reserve price of 80% of the market value is demanded for such forced sales.
Because nothing has been done, and lowprice auctions and evictions are continuing, Shaw is taking a case to the Constitutional Court on behalf of more than 290 clients who have lost their homes through sales in execution.
They are seeking a declaratory judgment that such sales, all of which are well below market value, are unconstitutional.
While it is impossible to establish an exact figure for the undersold value of such homes, Shaw estimates that it probably now totals “at least R60 billion”.
And Sibiya points out that among the sufferers are elderly people in Soweto who have had the houses they were born and raised in sold from under them because their title deeds have “gone missing”.
The system is immoral, open to corruption and in desperate need of fixing – sooner rather than later – especially given the gloomy economic outlook for the sellers of labour across the board.