Repossession mess gets its day in court
Gauteng Judge President Dunstan Mlambo wants a full bench of the High Court to sort out the mess of inconsistent judgments over home repossession cases.
In a recent practice directive, Mlambo says he also wants a full bench of the court to decide on the setting of reserve prices when properties are sold at sheriffs’ auctions.
Until recently, repossessed properties were sold at auction without reserve prices, resulting in some homes being sold for as little as R10. A recent change in High Court rules now allows judges to set reserve prices.
This, too, has caused confusion. Some judges have dismissed banks’ applications to declare properties “specially executable” without a reserve price, while others have done the opposite.
In April, former public protector Thuli Madonsela highlighted the injustice of selling properties for a fraction of their market worth, after the Pretoria High Court decided it was legal for Standard Bank to sell a R470 000 house for R40 000 to recover a mortgage debt.
Cases such as this have embarrassed the banks and the legal profession.
Following Madonsela’s advice, the Lungelo Lethu Human Rights Foundation (LLHRF), represented by lawyers at the Legal Resources Centre, has been joined to the proceedings.
Lungelo Lethu Human Rights Foundation president King Sibiya is one of the architects of the R60 billion class action suit being brought against the major lending banks for selling repossessed properties below market price.
“There is an epidemic of evictions in the townships in recent years, with gross abuse of court procedure. We recently surveyed several hundred evictees and more than half were not properly notified by the banks of their intention to bring legal action.
“How can you defend yourself when you do not know the bank is bringing legal action? It is time for the courts to sort out these inconsistent judgments and abuse of court processes by creditors.”
Moneyweb approached Standard Bank for comment on the directive. Ross Linstrom, spokesperson for the bank, replied: “As you are aware the matter is currently sub judicae and we therefore cannot comment on the questions that you have posed. Suffice for us to say that Standard Bank has duly served and filed its papers and we await the hearing of the matter.”