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12 Homes Saved By Courts

A Johannesburg High Court has refused one of SA’s biggest banks’ attempt to repossess 12 homes after a judge uncovered serious problems in the bank’s legal approach.

When consumers fall behind on payments and friendly collections methods fail, then according to the contract signed with the consumer (and SA law) the bank can send a Section 129 letter, 130 notice and start court proceedings by serving the consumer with a summons.

What normally follows is an attempt to get summary judgement (to avoid the lengthy 3 or 4 year waiting period and court case requirements that otherwise apply). If they are successful, the banks attorneys then ask the court to be allowed to auction off the property (or sell the car on auction).

Expecting things to go like normal a major south African bank submitted papers to court and were expecting to get permission to sell off 12 family’s properties.

Things did not work out that way.

NOPE!

Acting Judge Fiona Southwood found that the bank, its lawyers, and property valuers failed to meet basic legal and ethical standards.

In some cases, people were still making payments on their home loans, yet the bank claimed they were in arrears. The court said the bank’s explanations were not convincing and warned that such cases must be handled with care, especially when people’s homes are at risk.

The court found the same types of mistakes showing up again and again in the 12 cases that the bank’s attorneys brought to court. These errors not only wasted the court’s time but could have led to families unfairly losing their homes.

Some of the key issues highlighted in the judgment were:

    • Misleading the court: In one matter, the bank’s lawyer said the homeowner had been served legal documents, but that turned out to be untrue.
    • Incorrect arrears claims: Some consumers were still paying, yet the bank claimed they weren’t.
    • Faulty property valuations: In one case, the valuer didn’t even enter the house and guessed details like room sizes.
    • Unreliable valuers: The person doing the valuations didn’t provide proof of her qualifications or independent status.
    • Poor document handling: Court papers were either incomplete, missing, or not uploaded properly to the CaseLines system.
    • Flawed Section 129 notices: The required Section 129 notices to invite consumers to sort out problems were not properly served—one was even sent to the wrong email address.

Because of these serious mistakes, the court not only dismissed or postponed the matters but also referred the bank’s lawyers and valuers to professional bodies for investigation. They might now be fined, disbarred or sanctioned.

More Effort Required During Section 129 Process

In a related development, another court recently ruled that banks must make a real effort to engage with consumers during the Section 129 notice process.

This is the legal step where banks must offer help before starting legal action. The judgment said it’s not enough to just tick a box. Instead credit providers must show they actually gave consumers a real chance to find a solution. In that matter the consumer had made an offer and was paying that way but the bank basically just said: “no” and ran to court. They were also in for a rude awakening when the court told them they could not have the property without actually working to resolve the issue according to the Section 129 requirements.

Read More: Read about that court case here

One of those provisions is also the option to go to a Debt Counsellor and investigate if debt review is needed. While it has not been tested to see if this means that matters with 129 letters should be included into the debt restructuring court order yet, the implication is there.

This new matter with the 12 homes shows a growing trend in the courts to demand better behaviour from banks and to protect the right to housing, especially when people are in financial difficulty but are still trying to pay.

No More Rubber Stamping

This ruling is a clear warning to banks: the courts will no longer simply rubber stamp default judgments in repossession cases.

When banks try to take people’s homes, they must follow proper procedures and treat consumers fairly. The court stressed that people’s homes (especially primary residences) are protected under the Constitution, and banks cannot treat legal processes as a mere formality.

‘Judges are standing up for fairness and rejecting sloppily prepared cases that could lead to unnecessary evictions’

This case is a big win for consumers across SA, many of whom are trying to catch up on missed payments. Judges are standing up for fairness and rejecting sloppily prepared cases that could lead to unnecessary evictions.