Liberty Fighters Network (LFN), which successfully challenged government’s lockdown regulations in court, says a wave of evictions is already underway due to the extended economic lockdown.
“We see this as potentially the greatest threat to emerge from the lockdown crisis. As people lose their jobs or have to take a cut in pay, they are unable to pay their rents and mortgage bonds,” says Reyno de Beer, founder of the LFN, which last month defeated government in the Joburg High Court over its lockdown regulations.
Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma is appealing the ruling, which says the regulations are irrational and unconstitutional. Government was given 14 days to amend the regulations to comply with the constitution. De Beer says even though some of the regulations have been relaxed since the ruling, LFN plans to take it all the way to the Constitutional Court if necessary to ensure the government does not again overstep its powers.
“One of our primary concerns when we brought the case to the Joburg High Court was the potential for a humanitarian crisis of homelessness as a result of people being evicted due to the lockdown. We’ve been inundated with cases of people now being threatened with eviction and foreclosure, exactly as we predicted would happen,” says de Beer.
LFN was originally set up to provide legal support to those fighting evictions and to develop alternative methods of resolving rent and mortgage disputes. De Beer says government will be saddled with a massive crisis of homelessness unless it changes the law to put a freeze on evictions until the economy recovers, and to stop adverse consumer reports being filed with the credit bureaus.
“Once you’re in default and legal proceedings to evict you begin, this information is shared with the credit bureaus,” says De Beer. “That means once you are evicted, it is almost impossible for you to find alternative accommodation as all landlords will do a basic credit check on you.”
Flouting the three-month freeze
He adds that some landlords are flouting the three-month freeze on evictions, imposed by government at the start of the lockdown in March, by handing eviction letters to those unable to pay their full rent.
Under the lockdown regulations, no one may be evicted until Alert Level 3 is lifted – unless a court decides it is not just and equitable to delay the eviction. And this is where landlords are gaming the system.
De Beer points out that court registrars continue to enroll eviction cases in the high courts, despite the Pretoria High Court ruling in September 2018 that these matters should be heard in the magistrates’ courts, which are more accessible and less costly to ordinary citizens.
Consumer and legal activist Leonard Benjamin says he is likewise swamped with cases of threatened eviction. He recommends removing foreclosure matters entirely from the courts so they can be adjudicated in a less adversarial atmosphere, such as by an independent housing forum staffed with legal and accounting experts.
“There is too much skullduggery in the current system, and the courts are turning a blind eye to the behaviour of the banks and landlords,” says Benjamin.
“The system is massively skewed against the consumer, not least because of the high cost of fighting cases in court, especially in the more expensive high courts.
“These matters should be heard in magistrates courts, where the costs are much lower, but even here there are problems, as many judges do not understand banking and consumer law.
“No bank should ever be able to get an eviction without considering the circumstances of the person living in the household, yet this is precisely what is happening. Judges should refuse to hear eviction matters without tenants being able to place their evidence before the court.”
King Sibiya, president of the Lungelo Lethu Human Rights Foundation, which defends mainly township residents from unlawful evictions, says his organisation has likewise seen a spike in foreclosure cases in recent weeks.
“We can’t go on thinking this is business as usual. It is not. There is a catastrophe in the making, and government cannot sit by while tens of thousands of people are evicted from their homes after losing their jobs,” says Benjamin.
Two days’ notice
Says De Beer: “Just last week I had a case where a landlord instituted eviction proceedings on an urgent basis in the high court, giving the tenant just two days’ notice.”
The landlord claimed he needed access to the property to do renovations.
The tenant arrived at court to defend himself as he was unable to find a lawyer given the short notice, but was told by court security to come back another day.
The judge granted the so-called spoliation order (restoration of possession) without the tenant being present in court.
In this case, it appears the landlord knew he could sneak one past the judge on an urgent basis because the lockdown made it virtually impossible for the tenant to put up a defence.
“How can tenants defend against evictions if they can’t freely get legal assistance during lockdown?” asks De Beer. “Even once the lockdown is lifted, the law clinics and legal aid societies are going to be swamped with tenants facing eviction and landlords defaulting on their mortgage loans.”
The temporary freeze on evictions assumes conditions will bounce back to normal when the lockdown is lifted – which is completely false, says de Beer. The economic consequences of the lockdown will linger for years to come.
Though consumers are encouraged to take advantage of repayment holidays with their banks, this only applies to those already in good standing and up-to-date on their loans. Benjamin says the banks have been less than sympathetic to the massive financial hole caused by the lockdown to the pockets of ordinary South Africans.
“I would agree that we need a change in the law to suspend evictions,” says Benjamin. “There is a danger that opportunists take advantage of this, but there are ways to overcome this. What is needed is an independent alternative dispute resolution mechanism staffed by experts, who are able to make rulings based on all the available evidence.
“The way things stand, most people faced with foreclosure proceedings give up at the very first hurdle, not understanding their consumer and constitutional rights.”
He says one way to solve the problem is to follow precedents set overseas where forgiveness periods of one to two years are allowed to those in default on their home loans.
The New Economics Foundation in the UK, a country that is facing the same threat of mass evictions as SA, has recommended a temporary suspension of rents and a genuine mortgage freeze, where no interest accrues during the repayment holiday. Such a scheme in SA would have to be backed with government financial support for landlords, to be gradually unwound as economic conditions allow.
“Who is going to stand up for those being evicted when the economy was shut down and they lost their jobs through no fault of their own?” asks Sibiya. “Where is the government and its legislative power when it is needed?”
– This article first appeared on Moneyweb and has been republished with permission.