“The house is mine,” says Mashaba. “I took out a loan with the SA Perm (later acquired by Nedbank) in 1993 and never missed a payment. I have paid for this house in full. So why am I being evicted?”

It’s a question GroundUp put to Nedbank, which replied as follows: “It is worth noting that there is a significant amount of time that has lapsed in these matters. As a result, the process of investigating such matters tends to be complicated and therefore very lengthy.

“We assure you that we take the issues that you have raised very seriously and will do whatever we can to resolve these issues for our clients. It is not in our nor the client’s interest to repossess properties. We also encourage and invite clients to contact us as soon as they experience financial hard times, so we can try to find the best solution for them.”

No-one, it seems, is exactly sure how Mashaba ended up in this position – least of all Mashaba, now retired after spending most of his working life as a security guard at the nearby Knights Hospital. In 1993 he took out a R41,485 loan with SA Perm to acquire his dream house in Katlehong. By all accounts, he diligently paid his loan off by way of a monthly R585 debit order. But in 2006, the sheriff arrived at the house and said it had been sold to a new owner. Some time before this, it seems Nedbank had taken a default judgment against him, though Mashaba never received a summons, nor was he ever shown the alleged judgment. And if he was in arrears, the bank never informed him of this nor of its intention to take legal action against him.

The price paid by Nedbank for Mashaba’s house at the auction was R10. You read that right. Nedbank says this is deceptive as it credited Mashaba’s account with the full amount of the loan outstanding. Yet Mashaba continued his monthly repayments, oblivious to the fact that his house had a new owner.

Be that as it may, Mashaba and his family have been put through a decade of hell, waiting for the next visit by the sheriff.

The first eviction was in 2006, when the Mashaba family’s belongings were dumped on the street. As soon as the sheriff left, they moved back as they believed there was a mistake. Their attempts to convince the sheriff that they were up-to-date on their payments fell on deaf ears. Mashaba and his family were evicted a total of four times – in 2006, 2007, 2009 and 2011. In 2015, Absa applied to the South Gauteng High Court for his home to be sold in execution yet again. A study of the deeds register shows that the house has been sold multiple times over the last 11 years. All of this happened behind Mashaba’s back, yet each time the sheriff turned up to evict him, he had to suffer the humiliation of having his possessions thrown onto the street.

In November last year the house went on auction and was sold to an estate agent. Mashaba attended the auction and approached the buyer with documents proving that he had bought and paid for the house in full. The buyer pulled out of the sale. Mashaba remains in his house.

His fight is far from over. The sale in execution order remains in force, so it may end up being auctioned again by the sheriff.

All this happened before the National Credit Act came into force, so there was no obligation on the bank to issue a so-called Section 129 notice informing him that he was in arrears and giving him a period of time to either settle the arrears or face legal action.

It was also common practice at the time for banks to take judgment against clients without ever presenting the case before a judge. They would type up what looks like a court judgment and have it stamped by the court register. With this “judgment” in hand, the banks could then apply for the house to be sold in execution through various sheriffs’ auctions around the country.

Over the last 20 years thousands of homes have been repossessed by the banks without ever having their claims tested by a judge. This has since been declared unlawful by the Constitutional Court, which now demands that judges preside on such matters and consider the facts of each case.

GroundUp was invited by the Lungelo Letho Human Rights Foundation (LLHRF), which helps people facing unlawful or irregular evictions, to hear testimony from several township residents whose homes were sold behind their backs by the lending banks.

“We have been investigating what can only be described as an epidemic of evictions by banks in the township areas,” says King Sibiya, head of the LLHRF. “We have a number of cases of people who were evicted from their homes, even though they were up-to-date on their repayments, and in some cases, like Mashaba’s, where they were fully paid up.”

Sibiya says there is a conspiracy operating between certain individuals in the banks, property investment companies and the sheriffs’ offices. Former bank officials have set up property investment companies, often in partnership with politicians, and receive advance information from the banks of properties about to go on auction at the sheriffs’ auctions. These are often sham auctions, with syndicates agreeing beforehand on who buys what house and at what price. These are sold without reserve prices, which explains why Nedbank could acquire Mashaba’s house for just R10. This practice of selling at auction without reserve prices makes sheriffs’ auctions a nesting ground for bargain hunters and crooks. It is a practice that is forbidden in most other countries.

We previously reported on the case of Solomon Nhlapo, whose Soweto home was repossessed by Nedbank and sold at auction for R100. Nedbank and Nhlapo’s family have since reached an accommodation, and the good news is that Nhlapo remains in his house, free from harassment by the police and sheriffs. Nedbank has also reached out to those with similar complaints to come forward so an accommodation can be reached.

Another case involving Nedbank is that of John Mojaki, who took out a loan with SA Perm some 20 years ago so he could buy a house in Randfontein. The company he worked for paid half his loan repayments and he paid half. Mojaki lost his job in 1997 and fell into arrears. In 2010 he visited Nedbank to find out what the balance outstanding was. He was told it was R36,000, which included the arrears. At that time he had a job again so he recommenced his loan repayments. This time he was instructed to make his repayments through a company called Risk Solutions.

Yet in 2013 a police officer arrived at his door saying she had bought the house at auction. At some point, Nedbank appears to have taken judgment against him, though he received no summons, so he was unable to mount a defence in court. In this case, Nedbank bought the house back for R100 at auction, and then sold it on to Pyraned (which is also Nedbank owned). And then on 18 June 2014 Mojaki received a letter from Nedbank saying his loan had been fully paid up. He was instructed to ask the bank for his title deed, which he did, but did not receive.

As in Mashaba’s case, Nedbank says it acted lawfully at all times and credited Mojaki’s account with the full amount of the loan outstanding. Yet it continued to collect Mojaki’s repayments through Risk Solutions.

Mojaki contacted the President’s office for assistance and was referred to Billy Tsotetsi, who phoned Nedbank in Mojaki’s presence and asked the home loans representative from the bank the status of Mr Mojaki’s loan. It was confirmed that the loan was paid up. Tsotetsi confirmed this with GroundUp and has since provided an affidavit to Mojaki, verifying the above.

An eviction order was granted against Mr Mojaki on 15 March 2017 in the Randfontein magistrate’s court. A Windeed search confirms that in 1999 the property was bought by Nedbank for R100.

Mojaki says the only way he will leave his house is if he is taken out in a coffin.

Something is rotten in SA’s home repossession business. GroundUp met several more people with similar claims. Some have been evicted and now live in shanty towns. They lack sufficient knowledge of the law to defend themselves, and have turned to the LLHRF for help.

“We are saying that it should be much harder for banks to evict clients, even when they are in default. This is inhumane and unconstitutional. We should follow the example of countries like Greece and Germany, where it is extremely difficult to evict people in financial distress. They should be given time to get back on their feet, and their loans frozen until such time as they do,” says Sibiya.

Advocate Douglas Shaw represents many clients facing eviction from the banks. He says: “A house being sold for R10 will always be inconsistent with the Constitution and therefore invalid. It violates the right to housing as well as property. A law allowing such sales is similarly invalid. For the banks to use such a system knowing it to be completely dysfunctional is negligent. The bank must pay damages to those it has wronged. Having a judgment is no defence. Judgments must be executed without negligence.”

While the two cases highlighted in this article involve Nedbank, it is important to note that GroundUp is in possession of evidence of similar cases involving the other major banks.

Reply from Nedbank

It is worth noting that there is a significant amount of time that has lapsed in these matters. As a result, the process of investigating such matters tends to be complicated and therefore very lengthy.

Whilst we are cognisant that an article may be published in the absence of a comprehensive and factual response from Nedbank, the general process and principles that applied in such cases were as follows:

1. Whilst at the time the properties repossessed could have been bought-in by the bank at R10 or R100 as a result of a lack of bidding activity at the sale in execution (auction), the accounts were credited with the fair value of the property at that time. Our policy was to credit clients with the value of their property even if this value could not be obtained at a public auction. In these circumstances Nedbank would fund the difference. It is erroneous to draw conclusions about our conduct based on the sale price alone.

2. The clients who have subsequently obtained statements from the branches after the repossession may be left with the impression that the accounts are paid up as the statement reflected a small balance. However, they no longer own the property. The client has been provided fair value (as per point 1) minus any outstanding fees/costs. In fact, sales in execution only occurred when we were able to demonstrate to the court that the client had failed to honour their obligations.

3. Prior to 2007, when properties were repossessed, the appropriate laws were followed and cannot be compared or measured against the regulations of the National Credit Act (2005) which came into effect only in 2007.

4. It is our assertion that where we have repossessed properties we have done so correctly and in compliance with the statutory and regulatory frameworks applicable at that time. Where in our investigations we find that we erred, we commit to rectify same.

You will appreciate that we have a confidentiality obligation to our clients and as such we need to liaise directly with each of them. It would help tremendously if you would please provide us with the current contact details for each client that you have so that we may further look into their circumstances and communicate directly with them. We will seek to meet with each client and, with their permission, we welcome you to join the meeting.

We assure you that we take the issues that you have raised very seriously and will do whatever we can to resolve these issues for our clients. It is not in our nor the client’s interest to repossess properties. We also encourage and invite clients to contact us as soon as they experience financial hard times, so we can try to find the best solution for them.

This article was originally published on GroundUp