In April this year, former public protector Thuli Madonsela highlighted the injustice of selling properties for a fraction of their market worth, after the Pretoria High Court decided it was legal for Standard Bank to sell a R470 000 house for R40 000 to recover a mortgage debt.
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. Judge Mlambo also directed the court to establish under what circumstances Judges should set reserve prices on repossessed homes.
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 Sheriff’s and auctioneers to sell repossessed houses for a fraction of their worth.
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 reported the case of 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. A full citation of the case shall be provided once heard.