Easy evictions a thing of the past?

REPOSSESSIONS: CAPE TO DECIDE ON FOLLOWING GAUTENG

A sale-in-execution order results in an arguably unjust transfer of wealth.

Gauteng. Now the Cape court must decide whether to follow Gauteng’s example.

Evictions

This follows a change in court rules a year ago which allowed judges to set reserve prices in home repossession cases.

The Lungelo Lethu Human Rights Foundation (LLHRF) has campaigned for a change in court rules to stop easy evictions by banks. It says over 100 000 families have been evicted since the constitution came into effect, due to the ease with which banks obtained court judgments.

The LLHRF, a friend of the court, says in court papers that many evicted families end up destitute and cut off from economic recovery. It wants the court to balance the constitutional rights of those in financial distress with the banks’ right to recover loans.

Lawyers defending debtors against the banks say this practice of selling repossessed homes without reserve prices is an invitation to bid-rigging syndicates to pick up properties for a song, then flip them for quick profit.

A directive issued by Western Cape Judge President John Hlophe wants a full bench of the high court to decide on eight home repossession matters, six involving Standard Bank and one Absa.

Hlope wants the court to decide whether the change in court rules allowing reserve prices, introduces “substantive legal requirements” before judges can grant banks an order declaring a property “specially executable”. The Cape court must decide how judges should go about setting reserve prices before properties are sold at auction.

Serving summonses

The Cape court will also decide whether to follow the practice of other courts, where sheriffs personally serve summons on defaulting bank clients.

Before a home can be repossessed, banks must obtain a money judgment (usually for the full or “accelerated” amount of the outstanding loan) and a sale-in-execution order allowing the home to be sold at auction.

Hlope wants the court to decide under what circumstances to grant a money judgment, then delay the sale in execution.