Court hiccup for people vs banks

CONCOURT DENIES DIRECT ACCESS BY BYPASSING MAGISTRATE’S, SUPREME COURT Big lenders faced R60bn class action suit for attaching and selling homes for less than market value.

standing committee of finance and the portfolio committee on trade and industry on the transformation of the financial sector, as noted in an interim report.

It was previously reported that institutions cited in the application – Nedbank, Absa, FirstRand, Standard Bank, Changing Tides 12 (a trustee of the SA Home Loans Guarantee Trust) and Investec – stood to face a R60 billion class action suit related to the actions in attaching and selling properties at prices below market value.

This, as the application – filed by Advocate Douglas Shaw – also sought to establish whether the country’s current law of sale in execution is constitutional. A sale in execution refers to a process by which properties are sold at a public auction held by a sheriff of the court in order to recover home loan repayments that are in arrears.

The application claimed the process is unconstitutional in that it allows properties to be sold for less than their market value “which is against the rights to property and housing”, as defined by the constitution.

The applicants also termed a previous ConCourt order that stated banks must only sell properties as a last resort, “a dead letter”, and called for an explanation of what is meant by last resort.

The applicants also wanted the court to order that no debt shall be reclaimable from a creditor when a property is sold for less than the value of the bond. They also wanted the court to determine that attached properties may be sold by estate agents rather than sheriffs of the court to maximise sales prices for the benefit of debtors and creditors.