The Given Nkwane Case – Can the Bank sell your home to recover Mortgage Debt?

Today, most people cannot afford to purchase Immoveable Property (hereinafter referred to as “property”) without applying for a home loan to a bank and/or financial institution.

If the purchase of the property is subject to mortgage bond approval, it allows the Purchaser to apply for a home loan by using the property as security. The mortgage bond is then registered over the property as security by the bank and/or financial institution.

The bank and/or financial institution will use this to recover any debt should the Purchaser default on their home loan repayments, in which event the Debtor may lose their home. The bank and/or financial institution is entitled to recover its losses by applying for judgment against the Purchaser and selling the property should the Purchaser not make any arrangements to settle the outstanding debt.

The recent case of Nkwane v Nkwane and Others (36700/2016) [2018] ZAGPPHC 153 (22 March 2018) 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. This was the subject of a Pretoria High Court judgment handed down on 22 March 2018. The Court dismissed a challenge against the constitutionality of certain rules of court which enable the home of a Debtor to be sold without a reserve price.

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 000.00 house for R40 000.00 to recover a mortgage debt.

Divorced to his wife at the time, Given Nkwane’s (hereinafter referred to as “’Nkwane”) home valued at R470 000.00, was sold for R40 000.00 by Standard Bank after he defaulted on his home loan payments.

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