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.

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