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Press Release: Court matter on reserve price to be given poorer debtors’ perspectives

Press Release: Court matter on reserve price to be given poorer debtors’ perspectives

 

Published by Legal Resources Centre 29 June 2018

For Immediate Release: 29 June 2018

 

Yesterday, 28 June 2018, in the Johannesburg High Court, the Lungelo Lethu Human Rights Foundation (LLHRF), represented by the Legal Resources Centre, filed their submissions as a friend of the court in a matter regarding the setting of a reserve price during the foreclosure of homes.

The setting of a reserve price is relatively new in the South African context.  Judges have only been required to consider the setting of a reserve price in sales in execution since late last year when the Rules board amended the Uniform Rules of Court.

A reserve price is the lowest offer that can be brought on a piece of property on auction. The case concerns four matters where banks brought applications for foreclosure and where the full court is considering the issue of how to set a reserve price.

The Judge President of the High Court has invited amicus submissions to assist it with adjudicating this matter. The submissions will focus on how to set a reserve price in sales in execution and on how to implement the changes made to the Court’s Practice Manual since the Constitutional Court’s decision in Gundwana v Stecko Development CC.

Lungelo Lethu Human Rights Foundation represents the interests of poorer people who have been their clients in the past and who have had their houses sold in execution of a mortgage debt. In a number of cases, the clients’ houses were sold for very little. The investment of the clients in their home and the fact that their property is their only or biggest asset was never considered. This has impacted on their constitutional rights to housing, dignity and access to food and water.

LLHRF, represented by the LRC, will be presenting expert evidence from Dr Sean Muller from the University of Johannesburg. His expert evidence on economic theory aims to discount the assertions made by the banks regarding the reserve price and how it impacts on sales in execution.

In its affidavit to the court, the LLHRF requests the court to set up a panel of experts to present evidence in the issue of the reserve price at the Foundation believes that this will assist the court to understand the various options and approaches that are open to it.

The LRC is pleased to be able to provide the courts with a perspective from a foundation that is working at a grassroots level to protect the interests of poorer home owners. We believe that, by setting a reserve price, the courts will prevent infringements on the rights of many people across the country. The right to housing is an important right as it fosters the existence of other rights, such as access to food and water.

The matter will be heard in late-August.

ENDS

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