Exacerbating the housing problem

The allegations levelled this week, in an application to the Constitutional Court, are shocking. About 100 000 homes have been repossessed and sold in execution by banks in South Africa since 1994.

More than 90% of those houses were sold below prevailing market values. The application is for a number of plaintiffs to have direct access to the Constitutional Court to put their case that their houses were repossessed in an unconstitutional way.

The damages for which the banks could be liable in a successful suit would be about R60 billion.

The monetary scale of the claim is shocking enough, but the human tragedy behind 100 000 families losing their homes, and probably severely damaging their future prospects in the process, is truly stunning.

Advocate Douglas Shaw, who has been working with the Lungelo Lethu Human Rights Foundation to address the repossessions, and who lodged the application, argues that South African banks are five times more likely to repossess houses and sell them in execution than their counterparts in countries in Europe and the Commonwealth.

Shaw’s argument is that the high court should not issue an execution order if the loan can be rescheduled, if there is enough equity in the property to cover the payments in arrears or if the property can be rented out for enough to cover repayments.

The applicants also want the court to order that no debt should be reclaimable from a debtor if a property is sold for less than the value of the bond on it.

We believe the claimants’ voices need to be heard and that, in a country such as ours, where housing is a critical priority, these sort of practices should either not be allowed at all, or should be strictly controlled.

Seizing someone’s house and selling it for less than it is worth is, simply, inhumane.