Durban widow Valerie Naidoo faces eviction from her house in Chatsworth, after SA Home Loans (SAHL) repossessed and sold her property in 2021 using a ‘non-existent’ judgment claiming she had fallen into arrears, reports Moneyweb.

She has now approached the KZN High Court (Durban), asking it to set aside the sale and transfer of her property, and to order the Deeds Office to revive the title deed in her name.

The property, conservatively valued at roughly R800 000, was sold on auction for R102 000 on 26 July 2021 and transferred to the buyer a year later.

Naidoo alleges in court papers that the sheriff who sold the property did not have the authority to do so because the 2013 warrant of execution (allowing the property to be sold at auction) was without legal force because she had settled the claimed arrears amount of R18 093 when summoned by SAHL in 2009.

Her court papers show that SAHL acknowledged receipt of these funds, with a ‘nil’ arrears balance reflecting on her mortgage loan.

In terms of the National Credit Act (NCA), and confirmed by the Constitutional Court in the 2016 Nkata v FNB Constitutional Court judgment, any defaulting borrower who settles the arrears has automatically reinstated the mortgage agreement.

This means that any legal action launched against the defaulting borrower is stopped in its tracks.

The Constitutional Court’s ruling in Nkata v FNB makes it clear that in the event of a new instance of default by the borrower, the lender must start fresh legal proceedings.

However, when Naidoo fell into arrears again in 2016, SAHL used the 2009 summons it had issued against her for the previous default.

SAHL obtained judgment against her in 2013 and then used that judgment to sell her home in violation of the NCA and the Constitutional Court’s ruling in Nkata.

This was despite making an arrangement to repay and catch up on the arrears, reports Moneyweb.

Legal consultant Leonard Benjamin, who is helping Naidoo in this case, says credit providers are deliberately undermining the Nkata v FNB judgment by continuing to pursue foreclosure, using redundant legal proceedings.

In Naidoo’s case, Nkata appears to have been ignored as SAHL went ahead and repossessed her home based on a judgment obtained in 2013.

‘This was at a time when judicial oversight was less vigorous and, particularly relevant, the amendments requiring the judge to set a reserve price (a minimum selling price at auction) was not yet law. That only came into effect in 2018,’ says Benjamin.

Sikhumbuzo Mthembu, legal adviser at SAHL, replied to questions as follows: ‘We note that Ms Naidoo has instituted legal proceedings against SA Home Loans in connection with or in relation to the matters raised in your email. On the advice of our counsel, we will respond to all allegations in documents to be filed at court.’

Last week, SAHL said it had nothing further to add.

Full Moneyweb report