Landmark case will decide how banks are allowed to sell your home
A landmark case to decide how banks should deal with home repossessions will be heard on 28 and 29 August 2018 in the South Gauteng High Court.
This follows a directive by the Gauteng Judge President Dunstan Mlambo, who ordered a full bench of the court to sort out the tangle of inconsistent home repossession judgments, says Schoeman Law’s Shannon Vengadajellum.
According to Vengadajellum, Judge Mlambo also directed the court to establish under what circumstances Judges should set reserve prices on repossessed homes.
When obtaining a home loan in South Africa, a mortgage bond is usually registered over their home as security by the bank.
The bank will use this to recover any debt should the debtor default on their home loan repayments, in which event the debtor may lose their home.
This has raised the question of whether the bank should be allowed to sell the debtor’s home for an amount that is at least equivalent to the outstanding debt or to sell the property at any price.
“Court rules were changed late last year (2017) to allow Judges to set reserve prices when homes are sold at Sheriff’s auctions. This was done to stop sheriffs and auctioneers to sell repossessed houses for a fraction of their worth,” she said.
“Despite this, some courts in Gauteng continue to authorise the auctioning of houses (known as ‘sale in execution’) without reserve prices. The forthcoming case is believed to clarify how and when Judges should set reserve prices.”
GroundUp had previously reported on the case of Given Nkwane, whose home, valued at R470,000, was sold for R40,000 at auction by Standard Bank after he defaulted on his home loan.
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