Around 300 to take on banks in home repossession claim

More applicants join claim, make further case for direct access to Constitutional Court.
The initial application claimed the current process is unconstitutional as it allows properties to be sold for less than their market value. Picture: Moneyweb

A joinder application seeking permission for 70 new applicants to join a class action suit against the nation’s largest banks and home loan providers has been filed with the Constitutional Court.

The application brings the number of people seeking to participate in the civil claim against the likes of Nedbank, Absa, FirstRand, Standard Bank, Changing Tides 12 – a trustee of the SA Home Loans Guarantee Trust – and Investec, to around 300.

Moneyweb previously reported that the home loan providers face a R60 billion claim related to their alleged conduct in attaching and selling the homes of defaulting debtors at prices below market value.

This, after an application was filed by Advocate Douglas Shaw in August, to establish whether South Africa’s current law of sale in execution – whereby properties are sold at a public auction held by a Sheriff of the Court so as to recover home loan repayments that are in arrears – is constitutional.

The initial application claimed the current process is unconstitutional in that it allows properties to be sold for less than their market value “which is against the rights to property and housing”, as defined by the Constitution.

Read: Sale in execution a last resort, says Standard Bank

The latest application restates the applicants’ wishes to be granted direct access to the Constitutional Court. It’s argued that the case, which affects “the country as a whole”, is being brought by people who are “exceptionally poor” and so should be heard by the highest court in the land straight off the bat rather than first having to go through the Magistrates Court, High Court and Supreme Court of Appeal.  

In referring to matters that have transpired since the initial application, the joinder outlines further reasons for direct access to the Constitutional Court. Such reasons include willingness of the civil society organisations named in the initial application to contribute their own views, which suggest that “the matter is of importance to the body politic and to civil society”.  

The joinder also refers to a resolution to support the Constitutional Court action on behalf of applicants seeking damages for the auctioning of their houses below market value, contained in an interim report of Parliament’s Standing Committee of Finance and the Portfolio Committee on Trade and Industry on the Transformation of the Financial Sector.  

“For parliament to come out in favour of a case is singular and quite astounding. That the Legislature itself has, remarkably, voiced its view, is an indication that this matter should be heard by this court [the Constitutional Court], the highest court of the land.”

The Constitutional Court is still to decide whether it will hear the matter directly. It is expected that further joinders will be filed as more applicants seek to join the case.  

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What upset me is coming from America you can get a 30 year FIXED home bond @ 4%. Here they fluctuate the rate and hurt people every time there’s a rate increase. I BORROWED MONEY IN 2001 FOR A HOUSE AND I BORROWED IT ON CONTRACT. WHY IN THE HELL ARE YOU INCREASING THE RATE ON A CONTRACT DEAL MADE IN 2001??? They are ripping off South African’s blindly!!!!Cartel conditions.

That is SA for you: Our highest rates ever was in 1998, 25.5%. If we go to that rate again, millions could be homeless.

It is high time! Bank officials made ENOUGH money off venerable consumers. It is disgusting.

A fixed mortgage interest rate can cost a home owner dearly; a fluctuating interest rate is far better. How would you like to pay X amount when rates are on downward trend?

Extremely satisfied with this development. Good initiative!

Once again I say it. the people will still lose. The banks will just be fined and the government gets free money for the next Nkandla upgrades…. that’s the law in South Africa for you.

The worst of all this is that the banks (normally) does not make much effort to recoup the difference and in about 99% of cases write the surplus debt off as bad debt. BUT then they sell this debt at ridiculous prices -sometimes less than 10C in the Rand to debt buyers who then really go to town intimidating and harassing the original debtor. THIS IS ANOTHER PRACTICE THAT DOUGLAS SHAW CAN DIARIZE AND TAKE TO CONCOURT – For those who are interested I have done most of the arguing on this in preparation looking for the right sponsor………….

Previously disadvantaged are able to get 100% bonds when first time buyers .
when people have no skin in the game it is easy to walk away from debt.

End of comments.



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