SA's biggest banks face R60bn lawsuit over selling repossessed homes under market price
The class action suit involves around 100,000 former homeowners, says advocate Douglas Shaw.
House on auction, property. Wikimedia Commons/Infrogmation
The Money Show's Stephen Grootes talks to Douglas Shaw, advocate and banking law adviser.
Imagine the nightmare scenario where you can't keep up with your mortgage repayments, your financing bank repossesses your home and you're left with significant debt because they sell it on auction at way below market value.
Well, a large group of home owners who've been subjected to this, are taking some of South Africa's major banks to court and suing for R6 billion in a class action lawsuit.
The case dates back to 2017, explains the advocate spearheading the case, banking law adviser Douglas Shaw.
The matter is expected to be heard in February 2026.
This practice of auctioning off homes at 'ridiculously low prices' is a particularly South African phenomenon, Shaw says.
The complainants in this case number around 100 000 people.
"I think there are few people in South Africa, even those who work for the banks, who think it was ok to take somebody's house at R500 000 and sell it for R100, or a R1 million house and sell it for R300... and that's what our banks have been part of."
Douglas Shaw, Advocate & Banking Law Adviser
"One would have hoped our Constitution would give them pause for thought to consider if this was actually consistent with the Constitution."
Douglas Shaw, Advocate & Banking Law Adviser
Isn't it nonsensical for banks to do this in the first place?
On the one hand, people suspect that it could just be a case of banks being negligent and irrational, and wanting to get these properties out of their hair, Shaw says.
But on the other, there could be corruption involved.
"It could of course also be that a bank manager in, say Klerksdorp, knows somebody that can buy the house who's perhaps their relative but that is difficult to prove. It would be nice to have a large-scale criminal investigation of every one of these sales."
Douglas Shaw, Advocate & Banking Law Adviser
For more detail, listen to the interview audio at the top of the article