Ned­bank loses bid after cou­ple pay bond two weeks late

The Star Early Edition - - FRONT PAGE - ZELDA VEN­TER

A COU­PLE from Mey­ers­dal in Al­ber­ton nearly lost their home as the bank that held the mort­gage bond agree­ment in­sisted they pay back the en­tire out­stand­ing bond for be­ing two weeks late on their pay­ment.

Ned­bank turned to the high court in Pre­to­ria, where it claimed the pay­ment of more than R2.5 mil­lion from Ter­rance and Sylvia Mbambo.

This was the out­stand­ing amount of the bond at the time when the cou­ple fell in ar­rears for only two weeks. The bank ini­tially wanted the court to or­der that the prop­erty be ex­e­cutable and sold so it could re­cover the out­stand­ing bal­ance on their bond.

But the bank aban­doned this de­mand when the mat­ter was ar­gued in court. How­ever, the bank still in­sisted that the cou­ple had to pay the full out­stand­ing to­tal of their bond debt, even though their R28 000 monthly in­stal­ment was only two weeks late and fully paid by the time the sum­mons was served on them.

Judge DS Molefe not only turned down Ned­bank’s claim, but he also slapped the bank with the le­gal costs. The judge re­ferred to a land­mark Con­sti­tu­tional Court judg­ment in which it shed more clar­ity on the Na­tional Credit Act in re­la­tion to con­sumers.

The judge said the Con­sti­tu­tional Court’s Nkata judg­ment im­pacted sig­nif­i­cantly on the rights of con­sumers in their re­la­tion­ship with their banks. “The Con­sti­tu­tional Court has made it vir­tu­ally im­pos­si­ble for con­sumers to lose their homes.

“Even after a long pe­riod of be­ing in ar­rears, if the con­sumer made up those ar­rears and the agree­ment has not been can­celled; the agree­ment is re­in­stated,” the judge said.

In this case Ned­bank said it sim­ply acted in terms of the loan agree­ment signed by the Mbambo cou­ple.

In terms of the agree­ment, they had to pay their monthly in­stal­ment by the first of each month. If they failed, the bank was bound by the agree­ment to claim the en­tire out­stand­ing bal­ance of the mort­gage agree­ment at the time.

The cou­ple said they paid “re­li­giously” each month and of­ten even over­paid on their in­stal­ment. But on July 1, 2014 they were only able to pay two weeks later.

The cou­ple in fact on this oc­ca­sion also paid slightly more than their R28 000 in­stal­ment. Ned­bank, how­ever, in­sisted that the cou­ple were not punc­tual re­gard­ing their June 1 pay­ment, and that they should thus suf­fer the con­se­quences.

The cou­ple re­lied on the Nkata judg­ment, where Jus­tice Ed­win Cameron in­ter­preted the pro­vi­sions of the Na­tional Credit Act (NCA).

At the time, he said it was no longer a case where the pow­er­ful cred­i­tor could al­ways rule over the weaker con­sumer. He said the NCA con­tained clauses which spared con­sumers the harsh­ness of an era of debtorun­friendly laws.

Jus­tice Cameron said laws in the past en­abled fi­nan­cial in­sti­tu­tions to refuse late pay­ments of bonds and ac­cel­er­ate the pay­ment of the en­tire bond, but things had changed.

Judge Molefe said that when the cou­ple paid their in­stal­ment – al­though two weeks late – the credit agree­ment was re­in­stated.

Con­court has made it vir­tu­ally im­pos­si­ble to lose homes

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.