The short answer
Before giving an eviction order a court must balance your interests against the bank’s, and decide if selling the house is the best option, or if alternatives can be found to settle the debt.
The whole question
My father took a loan with the bank and used our house as security. He could not pay the loan and the bank repossessed our home. Then he later died. We have been living in the house for more than 20 years now the bank just shows up wanting to evict us if we don't buy it. What can we do?
The long answer
Thank you for your email about the bank repossessing your family home.
Section 26 of South Africa’s Constitution says that people cannot be evicted from their homes without a court order, and the court must look into all the facts of the case before making an order. This means that the court must balance your interests against the bank’s interests and decide if selling the house is the best option, or if alternatives can be found to settle the debt.
Before the bank approaches the court to evict you, it must try to negotiate a way for you to pay off the debt. This could be by restructuring the payments so that you pay only the interest for an agreed time, or by paying a reduced amount for an agreed time. It’s always best to communicate with the bank about your financial problems rather than ignore the notices they send. It usually takes about 90 days of not paying before the bank will start proceedings to repossess the house, and it takes about 27 months for the house to be sold in execution of the court order.
All the banks have “distressed seller” options where they will assist you to sell your house privately rather than the bank putting it on auction. Selling the house privately will usually fetch a better price than selling it on auction.
You could also approach Legal Aid which was involved in the case taken to the Constitutional Court in 2018, where the court said that judges must set a minimum price for a repossessed house if it is the person’s home, based on the market value and the amount of the arrears owing. This is so that a house can’t be sold so cheaply that the owner still owes a great deal of money on the outstanding bond after the sale.
Legal Aid has recommended a period of at least six months after the sale of execution order has been granted, to give the debtor time to reinstate the bond agreement and pay the instalments. Legal Aid has also taken on cases involving households where the parents had outstanding bond payments, and have died.
You can contact them here:
Legal Aid toll-free Advice line: 0800 110 110, or you can send a Please Call Me at 079 835 7179.
You could also contact the Legal Resources Centre:
Answered on March 15, 2019, 9:10 a.m.