South African Auction Laws lag behind International Standards | #eBiz Property | Douglas Shaw


In another example of the failure of South African banks to act legally and ethically when it comes to repossessions, this month, SA Homeloans illegally sold the home of Michelle Crausaz, in KZN, which has been in her family for many years. When a rescission or appeal is pending before the court, as was the case here, it is illegal to sell a house at auction.

The bank’s attorneys, Randles, decided to do so anyway and the sheriff, Burt Geerts, who is supposed to uphold the law, went along.

In another KZN example, Marc Kuster was evicted from his home by the Camperdown sheriff in the person of Gift Nxumalo, even though it was known there was an appeal of the eviction order for various reasons including that the eviction papers were (intentionally) never served on him. Kuster was allegedly attacked by the evicting party, and has filed charges against him.

Advocate Douglas Shaw, who is doing a PhD in repossession law, commented “Our law already gives much less protection to house owners than virtually every other country in the world and our banks sell a much higher percentage of properties, than other countries either in the developed or in the developing world.  It is shocking therefore when the banks go outside even our own law which is already far too lax towards banks and do something that is actually illegal. It is clear from the case of Khoza vs Body Corporate and rule 49(11) that this kind of action is illegal. The bank, their attorneys and the sheriff will be liable for any damages that flow from their illegalities.”

Neither the sheriff nor the attorneys in each case were at all unaware of the illegalities of what they were doing. Advocate Shaw wrote a letter to both explaining to them in case they were unaware. However, this did not deter them. Crausaz‘s property sold at auction for just over R600 000 a fraction of its worth – in actual fact lower that land value, and the property has many habitable dwellings on it.

“Our system of selling properties at auction is severely broken, again probably the worst in the world. Many countries like Japan sell the properties only for their market price. In Malaysia they can go down 10% from market price every 3 months, most properties therefore sell close to market. Even in Africa, there are better systems than ours – Ghana has a lower limit at 85% of market value below which properties cannot be sold.

Only in South African do we see tens of thousands of properties sold for half price or even quarter price. Many homes have been sold for R1000. I have seen the data myself,” says Advocate Shaw, part of the group.

Action is to be filed in the High Court for damages against the sheriff, Mr B. Geerts, the bank, South African Home Loans, and the attorneys, Randal’s Inc., in the Crausaz case and against the sheriff in the Kuster case. Camperdown sheriff’s office will also be liable for damages. There the sheriff is S.R. Zondi and his deputy sheriff, who was on location for the illegal eviction was Gift Nxumalo.


BizProperty-on-BizRadio-600x250Douglas Shaw  in conversation with eBizRadio’s Nick von Stein

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