Gauteng couple loses legal battle after their home is sold on auction without knowledge

A Gauteng couple got a rude awakening after they realised that their home was sold during an auction without their knowledge.

The couple bought the home in February 2011 through an FNB loan worth over R750,000.

In 2016, the husband was retrenched and subsequently fell into arrears with their bond repayments. As a result, he approached the bank to make repayment arrangements and was told to make payment of whatever he could in order to demonstrate his commitment.

Despite the above arrangement, the bank issued summons against the couple. However, after receiving his retrenchment package, the husband continued making payments but then he defaulted again.

In March 2017, the bank issued another summons which, unfortunately the couple did not receive. The bank subsequently obtained a default judgment against the couple in July 2017.

The application to have the property declared executable was set down to September 2017.

In November 2020 the husband received a call from the bank informing him that he was in arrears in the sum of R90,000 and had to pay 50% of the arrears to prevent the sale of the house on auction.

He paid R45,000 and made other payments in 2021.

According to his evidence he only failed to make payment in April and May 2021, and paid R2,600 in June 2021 to cover the shortfall on arrears. Despite making these payments property agents were hounding him wanting to buy his property. However, this did not bother him because he believed his settlement agreement with the bank was intact.

Subsequent to that he received a text message on his old phone advising him that the property was going on auction. In the same month, he received a call informing him that the house had already been sold to another couple in June 2021.

In an attempt to overturn the sale, the couple sought relief in the South Gauteng High Court in Johannesburg where they argued that they were not aware of the default judgment made against them in July 2017.

They further argued that their contract with the bank was unlawfully cancelled and according to them, their arrears were paid up, and therefore the loan agreement should have been reinstated. Moreover, there was no valid court order to make an application to have the property executable. They also wanted the court to order the registrar of deeds to re-register the property into their names.

In response, the bank attached a statement showing that in June 2021, the couple owed over R42,000.

The bank added that the couple was aware that their house was sold in June 2021 and they were also given an opportunity to settle the arrears in order to avoid the property from being sold.

The bank further argued that in order for the agreement to have been reinstated in terms of the National Credit Act, the couple must have paid all the overdue amounts as well as other prescribed default administrative charges.

Unfortunately, the couple did not pay these amounts and because of the absence of these payments, the agreement could not have been reinstated.

Acting judge Patrick Hasani Malungana presided over the matter and said he was in agreement with the bank because the couple had failed to provide evidence to prove that they are entitled to reinstatement of the credit agreement.

"There is, however, evidence to the effect that when the property was sold in execution, the applicants were in arrears with their bond repayments as reflected in the June 2021 statement."

"I accordingly conclude that the applicants have not made out a case for the relief sought, and that the application falls to be dismissed," said judge Malungana.

The application was dismissed.

sinenhlanhla.masilela@iol.co.za

IOL News

Get your news on the go. Download the latest IOL App for Android and IOS now.