R60bn class action against banks draws nearer
Hundreds of owners who had their homes repossessed – primarily due to missed bond payments – and then sold for a fraction of their true value, may be a step closer to justice as the long-awaited R60bn class action against banks is expected to soon get off the ground.
Advocate Douglas Shaw, who has dedicated years in building this and other related cases, said the Gauteng High Court (Johannesburg) is about to issue a date for the hearing, notes a Pretoria News report.
The case was lodged in 2020 and there were many delays, but it is now hoped that the court will within the next few months decide on whether or not to certify this as a class action.
Shaw said he believed unreasonable damage had been done by the banks to these people. Many had their homes auctioned off for as little as 10% of their market value, and have been homeless and destitute for over a decade. Some of those pinning their hopes on the court said they have been waiting since 2016 for some kind of judicial intervention.
‘Some of us are living below the poverty line due to the banks, who sold the houses for a pittance. We just want to ensure our case is heard and that we receive justice,’ one of the applicants said.
They are asking the court to represent various different classes. These include those whose properties were sold for more than 10% below market value. Up to 2017, the banks were selling houses at auctions without a reserve price, thus leading to substantial losses and the owners still owing large sums to the bank after the auction.
In 2018, the court altered the rules to include reserve prices for properties to be sold by auction by a bank.
The applicants dispute the constitutionality of selling properties in execution when it is not necessary, or when the sale price accepted is far lower than the market value of the property, says the Pretoria News report.
It is claimed that the average price properties have sold for in execution has been around 50% of the market value. In many cases, properties have sold for discounted prices of around 10% of the market value.
The banks are denying any wrongdoing.
FirstRand Bank, in a sentiment shared by the other banks, said in its opposing papers that there is a notion that the banks sell properties on auctions recklessly and without regard to the property owners, which is ‘simply not true’.
FNB said it takes ‘every reasonable measure to avoid selling properties in execution’.
The bank stated that consumers are told about their rights, such as that they may take a ‘payment holiday’ if they fall in arrears and that they only revert to selling a property in execution as a last resort.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.