Banks called to account for low-value repossessions of property
A GROUP of bond defaulters has moved to the next stage of a class action suit against all banks for repossessions and sales of properties at a fraction of their value.
The lawsuit by Ilungelo Lethu Human Rights Foundation, reportedly more than R62 billion, was re-routed from the Constitutional Court from a claim instituted at the South Gauteng High Court three years ago.
The foundation said yesterday that the action, focusing on the period between 1994 and 2018, was meant to hold the banks responsible for unscrupulous evictions of more than 100 000 housing bond defaulters from their properties which were subsequently sold for higher amounts.
Each of what is expected to be thousands of litigants is expecting the relevant bank to pay out the difference in the amount they repossessed for and that which the property was ultimately sold at.
“We have filed the action at the South Gauteng High Court because, as you realise, all the banking headquarters are in this province but we represent members from all over the country who have been treated brutally by the banking system in repossessing their houses,” said the foundation’s King Sibiya.
The group, which is represented by advocate Douglas Shaw, said they had been buoyed by a victory scored in late 2018 in which they received judgment prohibiting banks from selling repossessed properties without reserve.
The applicants are asking that the court trial focus “on the questions of whether the witnesses’ property was sold for substantially less than value and whether the sale was a last resort and thus whether the bank is liable to that class and to avoid issues extraneous to those issues.
“Victory for the applicants would result in financial compensation for their losses, the rescinding of any judgments against them and expunging adverse listings with the credit bureaus,” Sibiya said, adding that litigants each paid a R1 000 fee for legal representation.
The divergence of class in the suit pertains to litigants whose properties were sold for more than 10 percent below market value since the Constitution came into effect in 1994, those whose properties were sold by the banks in a manner which was not a “last resort” as required by law, those who remain in debt to the bank after their properties were sold for below market value and those who were overcharged on their bond fees in the course of legal action.
All the major banks are cited as respondents, as well as the National Credit Regulator, the SA Human Rights Commission and the Minister of Constitutional Development.
The Banking Association of South Africa (Basa) said it was unable to comment on the matter as it had not been provided with Shaw’s application.
“We can confirm that those members that offer home loans have indicated that they, to date, have not been served with the court application that is reported in the media. We are further aware of the fact that Mr Shaw brought a similar application in 2017 which matter was dismissed by the Constitutional Court,” Basa said.