Report on the Public Hearing on Housing, Evictions and Repossessions

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Abbreviations and Acronyms

ACHPR AfricanCharteronHumanandPeople’sRights

ACRWC AfricanCharterontheRightsandWelfareoftheChild

COHRE CentreonHousingRightsandEvictions

CRC ConventionontheRightsoftheChild

ESTA ExtensionofSecurityofTenureAct6�of1997

FNB FirstNationalBank

GAA GroupAreasAct41of1950

ICCPR InternationalConventiononCivilandPoliticalRights

ICESCR InternationalCovenantonEconomic,SocialandCulturalRights

IDP IntegratedDevelopmentPlans

NCA NationalCreditAct34of�005

PIE PreventionofIllegalEvictionsfromandUnlawfulOccupationof

LandAct19of1998

RDP ReconstructionandDevelopmentProgramme

SAHRC SouthAfricanHumanRightsCommission

SAPS SouthAfricanPoliceServices

SETA ServicesSectorEducationandTrainingAuthority

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Contents

Foreword

ExecutiveSummary

Chapter 1: Introduction1.1 LegislativeMandateoftheCommission1.� TermsofReference1.3 MethodologyandRulesofProcess1.4 StructureoftheReport

Chapter 2: The Right to Housing�.1. BriefHistory�.�. LegalFrameworkstounderstandtheRighttoHousing�.3. OtherprocessestoaddresshousingissuesinSouthAfrica

Chapter 3: Community Issues3.1 Introduction3.�. FlowChartoftheEvictionProcess3.3. Pre-defaultStage3.4. InstitutionoftheLegalProcess3.5. PostEviction

Chapter 4: Role Players4.1. RoleofBanks4.�. RoleoftheCourts4.3. RoleofSheriffs4.4. RoleofSAPS4.5. RoleofEstateAgents4.6. BulkBuyers4.7. RoleofGovernment

Chapter 5: Findings and Recommendations5.1. Government5.�. Banks5.3. Courts5.4. Sheriffs5.5. SAPS5.6. EstateAgents5.7 ConsumerAwarenessandUnderstanding5.8. Participation5.9. Monitoring5.10 Conclusion

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Foreword

TheConstitutionoftheRepublicofSouthAfricaAct108of1996(Constitution),andtheBillofRights itself,providestheframeworkbywhichwe,asanation,arerequiredtodevelopandbuildoursociety.Notwithstandingthefactthattheconstitutionalprovisionsareheldinhighesteemasbeingvisionaryandprogressive,therehavebeenandwillcontinuetobemanybattlesthatmustbefoughtaroundtheConstitution’sprovisions,howtheyareinterpretedandgiveneffectto,howtheyarebalancedagainsteachotherandultimatelyhowwearetomakechoicesinthemattersthataffectourlives.Thatisperhapsthenatureoflivinginaconstitutionaldemocracy.

The SouthAfrican Human Rights Commission (Commission), being a constitutionalbody, ischargedwiththetaskofpromotingrespectforhumanrightsandacultureofhumanrights,promotingtheprotection,developmentandattainmentofhumanrights,andthemonitoringandassessmentoftheobservanceofhumanrightsintheRepublic.The Commission, apart from taking notice of high profile court judgments, investigations andannual surveys thathighlight the inabilityofpeople tohaveaccess toadequatehousingaswellastheevictionandrepossessionprocess,hasreceivedmanysimilarcomplaintsinthisregard,particularlyfromthemembersoftheEnnerdale,LawleyandKathoruscommunitiesoftheGautengProvince.

Therighttohaveaccesstoadequatehousing-aswellastherightthatentrenchesthatnoonemaybeevictedfromtheirhome,orhavetheirhomedemolished,withoutanorderofcourt,orderofwhichisdecidedafterconsiderationofalltherelevantcircumstances-isacriticalrightwithoutwhichmanyotherfundamentalrightscannotberealised.TheCommission,aspartoftheworkofitsongoingmandate,hasaduty,inter alia,tomonitorthe exercise and enjoyment of this right.

TheCommissionhasdeemeditappropriatetoinitiateaPublicHearingwithaviewtoexploringthecontentoftheright,andthecontextinourcountryandinparticulartotheareasreferred toabove,withinwhich this right isgiveneffect to.ThePublicHearingaims to highlight the key issues that need to be addressed in order to fulfill the right to haveaccesstoadequatehousing,inadditiontotheevictionandrepossessionprocess,rather than seeking to be a definitive pronouncement on the content of the right.

Inaddition,thePublicHearingisanimportantmechanismavailabletotheCommission.ItisessentiallyaforumthatcreatesopportunitiesfordialoguesbetweenstakeholdersandalsoallowsforpublicaccountabilityasenvisagedbytheConstitution.ThePublicHearingalsoactsasanassessmenttoolforcriticallyevaluatingnotonlytheprogresswearemakinginthesector,butdeterminingtheadvancementoftherighttohaveaccesstoadequatehousingaswellastheevictionandrepossessionprocessitself.Whileitallowsforrobust,frankandopendebate,itisnotintendedtobeadversarial.

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TheviewsthatwereexpressedduringthePublicHearingaresynthesisedinthisReport.It provides findings and recommendations that seek to assist role players to grapple further with the issues that impede the full enjoyment of the right to have access to adequatehousingaswellastheevictionandrepossessionprocess.

OurthanksareextendedtoeveryonewhoparticipatedinandcontributedtothePublicHearing. Inparticular,wewould like to thankourcolleagueandCommissioner,LeonWessels,whopresidedas theChairpersonof thePublicHearing,andalso theotherpanellists,LouiseduPlessisandMothusiLepheana.Inaddition,aspecialwordofthankshastogoouttoLynetteBios,PandelisGregoriouandZenaPoggenpoel,aswellastoallstaffoftheCommission,whocontributedinavarietyofways.

Mostimportantly,weareextendingasincerethankyoutothoseindividualswhocontributedtothesubmissionsandsharedwiththepanelliststhehumanrightsinfringementsandviolationstheyareexperiencing.

WehopethatthisReportwillbecomeatoolthatwillassistinthetakingofmeasuresandtheimplementationofprogrammestoalleviatethenumerousproblemsthatbesetall aspectsof access toadequatehousingaswell as theevictionand repossessionprocessitself,contributingtoamorecomprehensiveunderstandingthereof.Ultimately,thesuccessofourdemocracydependsonourabilitytoensurethatthepromiseoftheConstitutionisabletoreacheveryone.

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Executive Summary

IntroductionIntheareaofhousing,thefocushasbeenonhousingdeliverytothemillionsofSouthAfricanswho,duringthecourseofapartheid,wereforciblyremovedfromtheirlandorduetostructuralpovertyhavebeenunabletoaffordhousingcurrentlyavailableonthemarket.Lessattentionhasbeenpaidtotheabilityofpeopletoretainhousesthathavebeenpurchasedthroughmortgagesorusedascollateralinsecuringloans.

TheCommissionhasreceivedcomplaintsrelatingtoevictionsandtherepossessionofhouses inEnnerdale,KathorusandLawley inGauteng.National legislationprovidesspecific procedures for repossessing houses and evicting occupants for failure to make mortgagepayments,howeveranumberofirregularitieshavebeenreported.

Community IssuesIssues raised through the complaints include evictions where people were neverinformedoftheevictionproceedings.Othersallegethattheyhavenotbeengiventheopportunitytobuytheirpropertiesbackthroughauctions.Moreinsidiousareallegationsthat law enforcement and local government officials have been buying the houses for themselves.Anadditionalcomplexityiswhenotherlowincomehouseholdspurchasethepropertiesandthenfacethedilemmaofhavingtoevicttheoccupants.

Theareaswherecomplaintshavebeenreported,areareasthathaveturbulenthistories.Many complainants fled their houses on the East Rand during the violence of the late 1980sandearly1990s.Otherareasweredestinationsforcommunitiessufferingfromforcedrelocations.Currentfactorsimpactingontheabilitytosecurehomesaremassiveunemployment,socialdislocationandeconomicdevastationfromHIVandAIDS,divorce,illnessanddeath.Anadditionalburdenhasbeenthenumberofinterestrateincreases,resulting inhighermortgagepayments.Thosemostaffectedby theevictionsare theelderly,childrenandhouseholdsheadedbywomen.

Theissuesraisedbythecomplainantshighlightthecomplexityofpoverty.Ifunaddressed,thecycleofpovertywillbeexacerbatedashouseholdsare lefthomeless,blacklistedwiththecreditbureauandcarryingthelegalcostsoftheeviction.

Role PlayersThe Public Hearing highlighted the conflict balancing act between the rights of those dispossessedandtherightsofthosewhohavepurchasedthehouses.Akeyquestionthatwasaddressedwaswhethercreditors in the foreclosure industryand thirdpartyrole players, such as bulk property buyers, are exploiting households in difficult circumstances. It raised the issue of communication and whether people were fullyawareoftheimplicationsofthetermsoftheagreementsthatweresigned.Consumer

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protectionandtheroleofgovernmentinprotectingtherightsofvulnerablepeoplecameunderscrutiny.TheroleoftheSouthAfricanPoliceServiceandtheroleoftheSheriffswerefoundtobecomplexinthattheyarebecomingthefaceofevictions.Theneedtoensure that the SAPS and the Sheriffs act within the confines of the law was reiterated.

Findings and Recommendations AlthoughthePublicHearingsfocusedonevictionsinKathorus,EnnerdaleandLawley,the issue is widespread and thus the findings and recommendations have a broader applicability.Thehearingfoundthatalthoughmanyoftheroleplayersarefollowingtheletterofthelaw,morecanbedonetoadvancetherighttoaccessadequatehousing.Furthermore, theroleplayersshoulddomore to liveup to idealsandthepromiseofubuntu. The Department of Housing, which focuses on low income first-time homeowners, failstoadequatelyaddresstheissueofevictionswhichoccurasaresultofpeoplewhodefaultontheirbondrepayments.Theverysameissueisalsonotbeingaddressedbytheprivatesector,whichhasrequiredanincreasingamountofcodes,guidelinesandlegislationtoensurethatitoperatesethicallyinthelowincomehomeloansector.

Thosefacingevictionsareavulnerablegroup,whothroughalackofawarenessoftheirrights andobligations, the legal processesand recoursemechanisms that theymayhave,areoftenexploitedbyunscrupulousbuyers.ItwasacknowledgedbytheSheriffsandtheSAPSthatillegalevictionsaretakingplace.Asthoseaffectedarevulnerable,itappearsthatthereistheperceptionthatthiscouldcontinuewithoutpublicscrutiny.Morehumanemeasuresshouldbeconsideredbytherelevantstakeholders.

ThePublicHearinghopestoshinealightontheseissues.Thoseoperatingillegallyneedto face the legal consequences. Role players implementing the minimum standardsoutlinedinlegislationneedtothinkonhowtheycangotheextramileinensuringthattheyplayapositiveroleinrealisingtherighttohousinginSouthAfrica.

Chapter 1: Introduction

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The right to have access to adequate housing is a central right in our constitutionaldemocracy. Without housing, other rights, including the right to an environment thatis not harmful to one’s health and wellbeing, access to healthcare, access to socialservices and water are also jeopardised. The right to housing is a basic human right and iskeytoensuringthatpeoplelivewithdignity.Itisanindispensablemeansofrealisingotherhumanrights.InSouthAfrica,therighttohousingisenshrinedintheConstitutionunderSection�6(1)and(�).

1.1 Legislative Mandate of the CommissionTheCommissionisobligedbyitsconstitutionalmandatetopromoterespectforhumanrightsand topromote theprotection,developmentandattainmentofhumanrights intermsofSection184oftheConstitution.Section9oftheSouthAfricanHumanRightsCommissionAct54of1994(HumanRightsCommissionAct)empowerstheCommissionto investigateand to reporton theobservanceofhuman rightsand to takesteps tosecureappropriateredresswherehumanrightshavebeenviolated.

1.2 Terms of reference for the Public HearingTerms of reference are based on the complaints received and outlines the followingareasforinvestigation:

1. The observance of human rights during the process of evictions in the areas ofKathorus,EnnerdaleandLawleyrelatingto:

1.1 Service of court process and notification of eviction proceedings, in particularallegationsofnon-servicetotheaffectedevictees;

1.� The sale in auction of the repossessed houses, including selling ofrepossessedhousesfornominalamounts,sellingofhousestothesheriffswhocarriedouttheevictions,andrefusingtoallowtheoriginalownerstobuybacktheirhouses;

1.3 The role of financing banks or institutions and Estate Agents in selling occupiedhouses, including sellinghousesafter payment arrangementshavebeenmadewiththeowners;

1.4 The conduct of SAPS or Metro Police Officers and the Sheriffs in treating theevicteesinhumanely;

1.5 TheroleofgovernmentandtheMinistryofHousinginprovidinghousingfortheevictees.

�. Toconsiderthecausesorreasonsforfailureorinabilitytopayforthemortgage bonds.3. Tofurtherascertainwhetherthepromotionandprotectionofhumanrightshasbeen

realisedbypublicandprivateroleplayerssuchastheDepartmentofHousing,theBankingAssociation,theBoardofSheriffsandtheEstateAgentsAffairsBoard.

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1.3 Methodology and rules of processThePublicHearingisnotacourtoflawbutaplatformthatcontributestothedialogueon the right tohousing in theabove-mentionedareas.ThePublicHearingcreatedaframeworkforallroleplayerswithinthehousingsectortoevaluateandinterrogatetheissuespertainingtoaccesstotherighttohousingandtheimplementationthereofwithinthecontextofthecomplaintsreceived.ThePublicHearingsprovideanaccountabilitymechanismthatcanserveasaneducationalopportunitytoallwhoattended.

ThePublicHearingwasconductedintermsoftherulesofprocedurepromulgatedinSection9(6)oftheHumanRightsCommissionAct.Intermsthereof,theCommissioncalled for submissions from the public and interested parties from the government,privatesector,non-governmentalsectorandaffectedcommunities.

ThecallforsubmissionswaspublishedintheGovernmentGazetteon�7August�007.Theclosingdateforsubmissionswas30September�007.ThePublicHearingswereheld from 7–8 November 2007 at the Commission’s Offices in Parktown.

A panel presided over the hearings.The panel was chaired by Commissioner LeonWessels and included Advocate Mothusi Lepheana, Provincial Manager at theCommission’s Free State Provincial Office and Ms Louise du Plessis, a practising attorneyattheLegalResourcesCentre.

1.4 Structure of the reportChapter�ofthisReportprovidesabriefbackgroundtohousingissuesinJohannesburgandhighlightsthelegalframeworkontherighttohousing.Chapter3discussestheissuesraised by communities at each stage of the eviction process. Chapter 4 reflects on the submissionsandresponsesofvariousroleplayerstotheirconductandtheallegationsmade. Chapter 5 contains the findings and recommendations of the Public Hearing.

Chapter 2: The Right to Housing

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2.1 Brief History1 Johannesburg’s spatial legacy has been shaped by racial segregation, which wasimplemented over the first 100 years of its history. Johannesburg grew from the late 1800s,whengoldwasdiscovered,fromaminerscampof3000peopletoacityof�50000people.At theonset, therewereattempts toexpelAfricans fromownershipandoccupationoflandreservedformining.

The Natives (UrbanAreas)Act of 19�3 further reduced the number of legal tenureoptionsforAfricanpeoplebymakingurbantenureconditionalonurbanemployment.By1946 therewasalreadyahousingbacklogwithAfricans restricted toout-of-townsettlements.

During the height of apartheid, the government devised the Homeland Policy, whichsawtheestablishmentoffourquasi-independenthomelandsandsevenself-governingterritories.TheBantustanswereoriginatedwhenAfricanswere repatriatedwhenevertheywerenotneededtoworkinthewhitecitiesandfarmingareas,andasaresulttheywere barred because of influx controls.

State housing for Africans was based on long leasehold or rental tenure and notownership. There was increasing overcrowding in townships and a mushrooming ofbackyardshacks.

From1983,politicalreformsintroducedblacklocalauthoritiesandallowedforthesaleofsomehomesrentedfromthestate.Localauthoritieswerethesitesofboycottsandprotestsastheyattemptedtoraiserevenuefromanimpoverishedpopulation.

Bytheendofthe1980s,townshipswereinacrisis;informalsettlementswereincreasing;thereweresevereinfrastructureandservicebacklogs;arefusaltopayforservices;abreakdowningovernanceandinnercitydecay.

Withthenewgovernment,therewasashifttotransformationanddelivery.ThegovernmentintroducedIntegratedDevelopmentPlans(IDPs),whichwereto‘enablelocalgovernmenttodealwithscarcitythroughaligningtheirbudgetswithservicedeliveryprogrammes’�.TheintentionwasthatIDPswouldresultinsustainablenewhousingsettlementscloseto job opportunities, social services and economic development nodes. According to the CentreonHousingRightsandEvictions(COHRE),thishasnotbeentheresult.Newdevelopments have been located on outer edges of townships, far from jobs, facilities and services. Transport costs have been a major barrier.

Informalsettlementshavebeenacontentiousissuewithsomeofthemlocatedonlandthat is unsuitable for development, but close to the livelihood opportunities. Despitea number of initiatives to address the housing backlog, thousands of people remain

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on waiting lists and are living in informal settlements.The lack of housing is thus acontributortopeople’sreluctancetomovefromhouseswhentheyarerepossessedasthereisalackofalternativeaffordablehousingstock.

2.2. Legislative Framework

ApartheidLandLaw3

EventhoughapartheidwasonlyformallyadoptedasapolicywhentheNationalPartycameintopowerin1948,theBlackLandAct�7of1913isregardedashavingbeenthefirst building block in the statutory framework that became known as ‘apartheid land law’. ThemainpurposeofapartheidlandlawwastosubdivideSouthAfricaalongraciallines,witheveryparceloflandeventuallyapportionedtoadesignated‘racezone’.

Existing colonial land dispossession was for the most part confirmed by the 1913 Act referred to above. Although it did not specifically provide for forced removals, the Act hadtheeffectofforcingpeopletoleavetheirlandbymakingitacriminaloffencetoenterintoanyagreement for the ‘purchase,hireorotheracquisition’ of landbetweenandacrossracelines(‘native’and‘non-native’).TheBeaumontCommission,whichreportedtoParliamentin1917,drewupalistof‘scheduled’areasinwhich‘natives’wereallowedtoownland.Thereportrecommendedtheexpansionofthescheduledareastoapointwhere13%ofruralSouthAfricawassetasideforblackoccupation.Afteradditionallandwasreleasedunder the1936DevelopmentTrustandLandAct, thispercentagewaseventuallyachieved.

TheBlackAdministrationAct3�of19�7,theDevelopmentTrustandLandAct,18of1936andthevariousGroupAreasActs(thelastofwhichwasAct36of1966)weretheother major apartheid land law statutes.

TheurbanequivalentoftheselawsweretheGroupAreasActs(GAA),whichworkedthrough creating categories of ‘qualified’ and ‘disqualified’ persons and specifically which land could be owned by which group and where.The successive CommunityDevelopmentActsexpropriatedandsold landwhichwasownedcontrary to its racialzoningtotheallocatedracialgroup.

The decision in S v Govender4 virtually brought to a halt the implementation of theGroupAreasAct36of1966(GAA)intheformerTransvaal.Section�6(1)oftheGAAcriminalisedtheoccupationoflandincontraventionoftheAct,butSection46(�)gavemagistratesthediscretionastowhetherornottoordertheevictionofapersonconvictedunderthissection.

Asummarydemolitionorremovalofbuildingsorstructureserectedoroccupiedwithoutthelandowner’sconsentwasprovidedforby1976withanewprovision,Section3B

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(1)(a),whichwasinsertedinthePreventionofIllegalSquattingAct5�of1951.Thisprovisionwasaclearattempt toexclude thecommon lawmandament van spoliee insuchcircumstances.Anousterclause6wasaddedin1977(section3B(4)(a)),makingitincompetent7 for any person to ask for an order, judgment or other relief founded on the demolitionorintendeddemolitionofbuildingsorstructuresintermsofSection3B.

The application of the Govender judgment to section 3 (1) of the Prevention of Illegal Squatting Act was effectively nullified by the further amendment in 1988 to the Act by removingthediscretionmagistratespreviouslyhadnottoorderevictionofapersonforcontraveningthePreventionofIllegalSquattingAct.

Thelandcontrolframeworkprovidedforthefollowinglandcontrolformsbeforethelandreformmeasureswereintroducedin1991:

a) Theso-called“blackareas”comprisingof:i) Urbanareas(outsideruralareas);andii) Areas (so-called “traditional areas”) encompassing the four national

states,self-governingterritoriesandSouthAfricanDevelopmentTrustland;aswellas

b) TheremainderofSouthAfrica,consistingofspeciallyproclaimedgroupareasaswellastheareascontrolledintermsoftheGroupAreasAct.8

With thedemiseof apartheid in1994,dismantlingapartheid land lawwasapriority.International and regional frameworks informed thenewConstitution, legislationandpolicies.

InternationalandRegionalHumanRightsFrameworkInternationally,therighttoadequatehousingandprotectionfromevictionsisenshrinedinArticle�5oftheUniversalDeclarationofHumanRights(1948)andArticle11oftheInternationalCovenantonEconomic,SocialandCulturalRights(1966).Theprovisionsintheseconventionsrecognisetheinterconnectednessofsocio-economicneedsandemphasisethathousingdeliverymustbeplannedtoensurethatcommunitiescanaccesssocialservicesandeconomicopportunities.

TheConventionon theRightsof theChild (CRC)extends the rights tochildrenandimposestheobligationonstatepartiestoassistparentswithprovidingadequatehousingfor their children.The InternationalConventiononCivil andPoliticalRights (ICCPR)guaranteesthateveryoneisequalbeforethelawandthatallpartiestoadisputeareentitled to a fair and Public Hearing by a competent and impartial judge.

TheAfricanCharteronHumanandPeople’sRights(ACHPR)recognisesthedignityoftheperson,statingthateveryoneisequalbeforethelawandhastherighttoprotection

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ofthelaw.TheProtocoltotheAfricanCharteronHumanandPeople’sRightsontheRightsofWomeninAfricaandtheAfricanCharterontheRightsandWelfareoftheChild(ACRWC)explicitlyguaranteewomenandchildrentherighttoadequatehousing.

ConstitutionalProvisionsTheConstitution recognises the rightofeveryone toadequatehousingandprohibitsunlawfulevictions.Section�6(1)and(�)statethat:

(1) Everyonehastherighttohaveaccesstoadequatehousing;(�) The state must take reasonable legislative and other measures, within its

availableresources,toachieveprogressiverealisationofthisright.

Itfurtherstatesthat,‘noonemaybeevictedfromtheirhomeorhavetheirhomedemolishedwithoutanorderofcourtmadeafterconsideringall the relevantcircumstances.’Theterm ‘relevant circumstances’, appears to require more explicit definition to ensure that peoplearenotdeprivedofpropertyunfairly.

TheConstitutionoutlinesfurtherprotectionthroughestablishingtherightofthechildrentobasicshelter.Propertyrightsareenshrinedandnoonemaybedeprivedofpropertyexceptintermsofthelaw.

NationalHousingLawandPolicy

The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act9

ThePreventionofIllegalEvictionsfromandUnlawfulOccupationofLandAct19of1998(PIE),prescribes theprocedures tobeusedforevictions.PIErequires that thecourthearingtheevictionrequestmustservewrittenandeffectivenotice.PIEalsoprovidesthatspecialconsiderationbegiventotherightsoftheelderly,children,disabledpersonsandhouseholdsheadedbywomen.Ifthestateisobtainingtheevictionorder,thecourtmusttakeintoconsiderationtheavailabilityofalternativeaccommodationorland.Thecourtmayappointthelocalsherifftooverseetheeviction.

ThePIEActreplacedthePreventionofIllegalSquattingAct5�of1951.ThePreventionofIllegalSquattingActatthetimeofitsrepealwaswidelyregardedasbeingunconstitutional.TheadministrationofthePIEActwasassignedtotheDepartmentofHousingin1999.

ThePIEActmayberegardedasthesisterstatutetotheExtensionofSecurityofTenureAct6�of1997(ESTA).ThePIEActappliestoproceedingsforevictionagainstunlawfuloccupiers, whereas ESTA lays down the procedures that must be followed, and thesubstantive grounds that have to be satisfied, in relation to the eviction of a lawful occupier.

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The two main differences between the ESTA and the PIE Act are, first, that the latter statuteprovidesproceduraldefencesonlyagainsteviction,applyingtopeoplewhohavenosubstantiverightsinlaw.Second,unliketheESTA,thePIEActappliesthroughoutSouthAfricaanditsareaofapplicationisnotgeographicallyrestricted.

The term ‘unlawful occupier’ is defined in Section 1 of the PIE Act as meaning:

“A person who occupies land without the express or tacit consent of the owner or person in charge, or without any other right in law to occupy such land, excluding a person who is an occupier in terms of the Extension of Security of Tenure Act, 1997, and excluding a person whose informal right to land, but for the provisions of this Act, would be protected by the provisions of the Interim Protection of Informal Land Rights Act, 1996 (Act 31 of 1996).”

The word ‘occupies’ in this definition is ambiguous. If the word ‘occupies’ is understood as‘takingupoccupation’,thePIEActwouldapplyonlytopeoplewhomoveontolandwithoutpermission.If,ontheotherhand,itisreadtomean‘isoccupying’,thePIEActwouldapplynotonlytocasesoflandinvasion,butalsotocasesof‘holdingover’.Thisiswhereacommonlawtenantrefusestovacatepremisesafterlawfulterminationoftheleaseagreement.

ThequestionwhetherthePIEActappliestocasesof‘holdingover’mayberephrasedasaquestionofwhetheritispossibletomovefrombeinglawfuloccupiers(underESTAorthecommonlaw)tothatofunlawfuloccupiersunderthePIEAct.

Ndlovu v Ngcobo; Bekker and Another v Jika10settledtheuncertaintysurroundingtheapplication of the PIE Act. Harms JA held that the ordinary meaning of the definition of an‘unlawfuloccupier’inSection1ofthePIEActappliestoallthosewhoseoccupationofanother’sproperty,atthetimetheirevictionissought,isunlawful,regardlessofwhethertheirprioroccupationofsuchpropertywaslawfulornot.TheprovisionsofthePIEActnowhavetobefollowedinallapplicationsfortheevictionofunlawfuloccupiers,includingthatoftenantswhoinitiallytakeupoccupationofthelandintermsofaleaseagreement,butwhorefusetovacatethelandafterlawfulterminationoftheagreement;aswellasmortgagors(i.e.homeowners)whodefaultontheirbondrepaymentsand,afterexecutionofthebondandtransferofthepropertytoathirdparty,remaininoccupation.Incomingtothisdecision,HarmsJAstructuredthisargumentbasedonthepresumptionthatwheretheliteralmeaningofalegislativeprovisionisclear,itfollowsthatanintentiontoalterthecommonlawinlinewiththatliteralmeaningmaybeinferred.AccordingtoHarms JA, the literal meaning of the definition clearly covers a person who occupies landunlawfullyatthetimewhenproceedingsforevictionwereinstituted.

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Shoprite Checkers (Pty) Ltd v Jardim11 confirmed that the PIE Act is not relevant where propertyisbeingusedforbusinessorcommercialpurposes.1�

Procedure under the PIE Act13

Theproceduretobefollowedandthecircumstancesthatneedtoconsideredbyacourtwhentheownerorpersoninchargeofthelandwantstoevictanunlawfuloccupier,issetoutinSection4ofthePIEAct.Section4(1)providesthat:

Notwithstanding anything to the contrary contained in any law or the common law, the provisions of this section apply to proceedings by an owner or person in charge of land for the eviction of an unlawful occupier.

ItisplausibletoreadthisprovisionasmeaningthatboththecommonlawandthePIEActmustbecompliedwith.Inpractice,however,thecourtshavegrantedevictionordersinproceedingsbroughtpurelyunderthePIEAct,withoutrelianceonthecommonlaw.Thesubstantivegroundsforthegrantingofanevictionorderunderthecommonlawwillalsobemetiftheapplicant/plaintiffprovesthats/heoritistheownerofthelandandthattherespondent/defendantisanunlawfuloccupierunderthePIEAct.

Section4(�)providesthat:

At least 14 days before the Public Hearing of the proceedings contemplated in subsection (1), the court must serve written and effective notice of the proceedings on the lawful occupier and the municipality having jurisdiction.

AnevictionorderunderthePIEActmaynotbegrantedex parte (i.e.intheabsenceoftheunlawfuloccupier/s)intermsofthisprovision.14

It would appear that it is also not possible to apply for default judgment in proceedings under thePIEActbecauseSection4(�)contemplates theholdingofahearing.Theownermustrequestthecourttosetthematterdown,andtoservewrittenandeffectivenoticeofthedateonwhichthematterwillbeheardontheunlawfuloccupierandtherelevantmunicipality,ifthematterisundefended.Thecourtmustgranttheorderinopencourteveniftherespondent/defendantfailstoattendthehearing.

Section4(�)providesthatthecourt,nottheowner’sattorney,mustservethenotice.Thisdoesnotmeanthatthecourtitself,‘inthepersonofaJudgeorMagistrate’mustservethenotice.Whatitdoesmeanisthat‘thecontentsandthemannerofserviceofthenotice…mustbeauthorisedanddirectedbyanorderofthecourtconcerned’.15

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Inadditiontotheothercourtnoticesthatmayordinarilyberequired,e.g.noticeintermsoftheUniformRulesofCourtRules4and6inmotionproceedingsintheHighCourt,Section4(�)requiresafurthernoticetobedelivered.

TheSection4(�)noticemustbeauthorisedanddirectedbythecourtonlyafterallthepapersonbothsideshavebeenserved, ifHighCourtmotionproceedingsareused,sincethisiswhenthedateofthehearingwillbedetermined.

Withregardtowhatconstitutes‘writtenandeffectivenoticeofproceedings’asrequiredbySection4 (�),notwithstanding thisprovisionbeingperemptoryand requiringstrictadherence,thisdoesnotmeanthatanydeviationtherefromisnecessarilyfatal.16

Notice of the proceedings must be ‘effective’.Typically this means that the ordinaryprocedureforservingofnoticesincivilproceedingsinthecourtinquestion(Magistrates’CourtorHighCourt)mustbefollowed(Section4(3)).Thecourtmaydirectthatthenoticebeservedinsomemanner(substitutedservice),provideditis‘adequate’,i.e.provideditputstheunlawfuloccupierinapositiontodefendthecase(Section4(4))wheretheordinaryrulesgoverningtheserviceofnoticesareinconvenientortoocumbersome.

Notwithstanding the fact that illegal settlements fluctuate and that persons are constantlymovinginandoutofthecommunity,thecourtinIllegal Occupiers of Various Erven, Philippi v Manwood Investment Trust Company (Pty) Ltd17heldthatoneofthefoundations of litigation is the identification of the parties and that adequate measures mustbeattemptedtoidentifytheoccupants.

Thecircumstancesthatthecourtmustconsiderindecidingwhetherornottogranttheevictionorder,dependsonthelengthoftimethatthedefendant/respondenthasbeeninunlawfuloccupation,assumingthatthenoticeiseffectiveandthattheownerprovesthattherespondent/defendantisanunlawfuloccupier.AdistinctionisdrawninSection4(6)and(7)betweenunlawfuloccupierswhohavebeeninoccupationofthelandforlessthansixmonths,andthosewhohavebeeninoccupationforlonger.Therightsandneedsoftheelderly,children,disabledpersonsandhouseholdsheadedbywomenmustbeconsideredinbothcases.Thecourtmustinadditionconsider‘whetherlandhasbeenmadeavailablebyamunicipalityorotherorganofstateoranotherlandownerfortherelocationoftheunlawfuloccupier’(Section4(7)),wherethelandhasbeenoccupiedforlongerthansixmonths.

Theavailabilityofsuitablealternativeaccommodationor landforresettlementshouldhowevernotbeelevatedto‘apreconditionforthegrantingofanevictionorder’,whetherunderSection4or6.18NotwithstandingthefactthatcourtsarenotbarredfromgrantinganevictionorderunderSection4,followingthefactthatthelandownerhasfailedtoprovethattheunlawfuloccupierswouldhavesomewhereelsetogoweretheyevicted,

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courtsmaysuspendtheevictionorderforaperiodoftimetoallowtheunlawfuloccupantsan opportunity to find alternative accommodation.

Section 5 of the PIEAct in certain circumstances allows for urgent proceedings foreviction.

Anorganofstateisauthorisedtoinstituteproceedingsfortheevictionofanunlawfuloccupier from land which falls within its area of jurisdiction in terms of Section 6 (1) of thePIEAct.Inthiscase,Section6(3)providesthatthecourtmusthaveregardtothreefactors when deciding whether an eviction order would be just and equitable, namely:

(a)the circumstances under which the unlawful occupier occupied the land anderectedthebuildingorstructure;

(b)theperiodtheunlawfuloccupierandhisorherfamilyhaveresidedonthelandinquestion;and

(c) theavailabilitytotheunlawfuloccupierofsuitablealternativeaccommodationorland.

Itisclearfromtherestofthissectionthatthelegislatureintendedthisprovisiontoapplytoasituationwherethelandisprivatelyowned,andtheownerforsomeorotherreasonis reluctant to institute eviction proceedings. In such circumstances, the responsibleorganofstatemay institute theevictionproceedingsand recover thecosts from theowner.TheproceedingsshouldbeinstitutedunderSection4,i.e.bytherelevantorganofstateinitscapacityasrepresentativeowneroftheland,wherethelandisownedbythestate.

ItisofvaluetonotethatinPort Elizabeth Municipality v Peoples Dialogues on Land and Shelter & Others19thecourtheldthatthegeneralapproachthatoughttobefollowedinconsideringanapplicationforevictionunderthePIEActisthatofbalancingopposinginterests in deciding whether it was ‘just and equitable’ to grant an eviction order. The court added that the terms ‘just and equitable’,

“… relates to both interests, that is what is just and equitable not only to the persons who had occupied the land illegally, but to the landowner as well. The term also implies that a court, when having to decide a matter of this nature, would be obliged to break away from purely legalistic approach and have regard to extraneous factors such as morality, fairness, social values and implications and any other circumstances which would necessitate bringing out an equitable principled judgement.” (1081F-G)

The Constitutional Court confirmed in Port Elizabeth Municipality v Various Occupiers�0that theapproachbyHornAJ inPort Elizabeth Municipality v Peoples Dialogues on Land and Shelter & Others was judicially and academically sensitive and balanced.

�0

Section 4 (8) states that if a court is satisfied that all the requirements have been met andthatnovaliddefencehasbeenraisedbytheoccupier,ithastograntanevictionorder. The details regarding a just and equitable date on which vacation is to take place; andadateonwhichtheevictionorderistobecarriedoutifvacationdoesnotoccur,mustbecontainedinsuchanorder.Afteralltherelevantfactorshavebeentakenintoaccount,suchastheperiodofoccupation,acourtshalldeterminetheequitabledate.�1

Otherrelatedlegislation

TheNationalBuildingRegulationsandBuildingStandardsAct103of1977isoftenusedtoeffectevictionsonthegroundsofhealthandsafety.

TheNationalHousingAct107of1997outlinestherolesofthevarioustiersofgovernment.IncludedintheHousingActistheestablishmentofaNationalHousingCode,theSouthAfricanHousingDevelopmentBoardand theHousingSubsidyScheme.Thecoreofhousing delivery has been the provision of subsidy assistance to low income first-time homeowners.

The Home Loan and Mortgage Disclosure Act 63 of 2000 establishes the Office of Disclosure to monitor financial institutions providing credit. The Disclosure Act does not requirebankstodiscloseinformationaboutforeclosedloans.

TheUpgradingofLandTenureRightsof1991providesfortheconversionoflandtenurerights to ownership. Ownership by conversion is subject to any mortgage bond registered immediatelybeforesuchconversion.

TheUsuryAmendmentAct10of�003offersconsumerprotection.UndertheAct,theDirectorateofLicensingandInspectionsissupposedtoundertakepro-activeinspectionson financial institutions.

National jurisprudenceLitigationonhousingrightshasfocusedontheState’sfailuretocaterforpeoplelivingin desperate circumstances while they wait in the queue for low-cost housing. ThelandmarkcasehasbeentheGovernmentof the Republic of South Africa and Others v Grootboom and Others.��Thecourtfoundthatthestate’spolicywasnotreasonableasitdidnotcaterforpeoplelivinginsituationsofcrisisordesperateneed.

Government of the Republic of South Africa and Others v Grootboom and Others �001(1)SA46(CC)�3

TheGrootboomcaseconcernedacommunityofpeoplewhoinvadedlandtheyrenamed‘NewRust’afterhavingleftanareaknownasWallacedeneintheWesternCapeProvince.Theprivateowneroftheinvadedland,underthePreventionofIllegalEvictionfromand

�1

UnlawfulOccupationofLandAct,19of1998(PIE),obtainedanevictionorderagainstthe community. The community members sought shelter on the Wallacedene sports field aftertheorderwasexecuted.Theirattorneywrotealetterrequestingurgentassistanceto the relevant local government authority (the Oostenberg Municipality). Relying onSection�6(1)and(�),andSection�8(1)(c)ofthe1996Constitution,thecommunitythensued theMunicipality in theCapeHighCourt for temporaryshelter.Anorder intermsofSection�8(1)(c)wasgrantedbyDavisJ,instructingtherespondenttoprovideshelterforthechildrenoftheWallacedenecommunityandaccompanyingparents.ThestateappealedagainsttheordertotheConstitutionalCourt.

TheessenceoftheConstitutionalCourt’sdecisionin Grootboomisthatwherethestateisrequiredtoprogressivelyrealiseasocio-economicright,bothgovernmentpolicyandthemeasurestakentoimplementthatpolicymustbe‘reasonable’.Whenapolicyfailstocaterforpeoplein‘desperateneed’itisnot‘reasonable’.

In so doing, the direct applicability of the United Nations Committee on Economic,SocialandCulturalRightsGeneralComment3of1990paragraph10onminimumcoreobligations was rejected by the Constitutional Court. The reference in article 2 (1) of the InternationalCovenantonEconomic,SocialandCulturalRightstotheobligationonaStatePartytopromoteCovenantrights‘tothemaximumofitsavailableresources’wasinterpretedbythecommenttomeanthatstatepartieshadtodevotealltheresourcesattheir disposal first to satisfy the ‘minimum core content’ of the right in question.

There were two bases for the Constitutional Court’s rejection of this approach in Grootboom.Firstly,andparticularlygivenregionalvariationsandtherural/urbandivide,the court held that there was insufficient evidence before it to allow it to determine the minimumcorecontentof the right tohousing inSection�6of the1996Constitution.Secondly,theprimaryemphasisinSouthAfricashouldbeplacedonwhethergovernmentpolicywasreasonable,especiallygiventhetextualdifferencesbetweenSection�6(1)and(�)ofthe1996ConstitutionandArticles�.1and11.1oftheICESCR.Anindicatorof this larger inquiry is the minimum core content of the right to housing.A housingpolicy was clearly unreasonable and therefore unconstitutional that did not cater forpeopleindesperateneed.Withtheinevitablebudgetaryimplications,theappellantwasaccordinglyorderedtoamenditspolicy.However,thecourtstoppedshortoforderingthe government to prioritise spending on the provision of emergency shelter, as thewholesaleadoptionofGeneralComment3paragraph10wouldhaveentailed.

In paragraphs 39 to 46 of the judgement in Grootboom,thethreeconstituentpartsofSection�6(�)areconsideredseparately.

Theallocationofresponsibilitiestodifferentspheresofgovernmentiswhatisprimarilyinvolved when reference is made to ‘reasonable legislative and other measures’.

��

Althoughnottheonlyway,italsomeansthatthepolicymustbetheoreticallycapableof realising the right inquestion;and that the implementationstrategy itselfmustbereasonable. A programme that excludes a significant segment of society cannot be said tobereasonable.

Withregardtothe‘progressiverealisationoftheright’partofSection�6(�),theUnitedNationCommitteeonEconomicSocialandCulturalRightsGeneralComment3paragraph10interpretationtotheeffectthatprovisionlikethis‘imposesanobligationtomoveasexpeditiouslyandeffectivelyaspossibletowardsthatgoal’,wasadoptedbythecourt.Withsuchanapproachthe‘deliberatelyretrogressivemeasures’areimpermissible.

Impact of Section 26 (3) on the common law pleading requirements in an action for ejectment

Oneneedstoconsidertheimpactoftheconstitutionalevictionprincipleoncommonlawevictionsinnormallandlord-tenantevictions,wherethelandreformlawshavebeensaidnottoapply.Graham v Ridley�4andChetty v Naidoo�5setoutthecommonlawpleadingrequirementsin an action for ejectment. According to these two cases, ownership of the land and the factthatthedefendantisinoccupation,aretheonlytwothingsthattheplaintiffneedstoallegeandprove.Theownermustobviouslyanswerthispleainhisorherapplicationif thedefendantpleadslawfuloccupationintermsofa leaseagreement.Theplaintiffassumestheonusofprovinglawfulterminationofthedefendant’srighttooccupythelandintermsofanagreementofleaseiftheplaintiffatanypointconcedestheexistenceofsuchanagreement(whichstrategicallys/hemaybeforcedtodo).

Section�6(3)ofthe1996Constitutionprovides:

No one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances. No legislation may permit arbitrary evictions.

InRoss v South Peninsula Municipality�6thecourtheldthatthecommonlawwithregardtoevictionshadbeenalteredbySection�6(3)oftheConstitution.Asopposedtothecommonlawsituationwhereapersonwhoseekstoevictanillegaloccupierfromhisorherhomesimplyhadtoallegeownershipofthepremisesandoccupationbythedefendant,thecourtargued thatSection�6 (3)placedanextraonusofproofon theplaintiff toinform the court of circumstances justifying the eviction, placing sufficient information beforethecourttoenableittoexerciseitsconstitutionaldiscretionandconsideralltherelevant circumstances.The court, when considering which circumstances would berelevantinsuchacase,determinedthatthePIEActcouldprovideguidanceandthatthe legislature’s interpretationof theconstitutional requirementmeant that the ‘rights

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andneedsoftheelderly,children,disabledpersonsandhouseholdsheadedbywomen’shouldbeprotected.�7

In thedecisionofBetta Eiendomme (Pty) Ltd v Ekple-Epoh �8 thecourtheld that the‘normal landlordand tenant’ relationshipsarenotaffectedbySection�6(3), therebydecliningtofollowRoss.ThecourtinBetta Eiendommeapproachedthematterinthefollowingway:thecommonlawregardingtherightofownershipmakesitclearthatalandownerisentitledtopossessionofhisorherpropertyundernormalcircumstances;thecommonlawrightofownership‘asrecognisedbeforetheConstitutionhasnotbeenaffectedbytheConstitution’,andownership‘stillcarrieswithinittherighttopossession’;therestrictionoftheowner’srightsasagainstanillegaloccupierofthelandisneitherrequiredby the textofSection�6(3)nor theconstitutionalobligation topromote thevalues that underlie the Constitution or the spirit, purport and objects of the Bill of Rights;andlastly,themerefactthattheplaintiffistheownerandthatthedefendantisinpossessionrendersit‘rightandproper’thattheownerbegrantedanevictionorder,intheabsenceofconstitutionalorlegislativeinterferencewiththeowner’srights,‘againstsomeonewhohasnobusinessinterferingwiththepossession’.�9

ThecourtrestrictedSection�6(3)oftheConstitution’sapplicationtocaseswheretheejectment order is sought under apartheid-style legislation, therefore depicting it as a ‘neveragain’provision.FlemmingDJParguedthatthecourtinRosswaswrongtocitethePIEAct forguidanceon ‘relevantcircumstances’.Theneed toprotectownershiprights and the concomitant rights of contract, together with the impact of ‘squatting’on the South African economy (of which the court took judicial notice), are rather the circumstancesthatoneshouldconsiderwhenapplyingSection�6(3).Thecourtheld,later on in the judgment, that relevant circumstances were those circumstances that hadbeenmaderelevantbythepleadings.Thecourtneednotgoinsearchofrelevantcircumstances,i.e.theordinaryadversarialmodelapplied,wherethedefendanthadnotpleaded anything, as is by definition the case in an application for default judgement.

TheSupremeCourtofAppeal(SCA)settledthecontroversyovertheimpactofSection�6(3)onthecommonlawin Brisley v Drotsky30,whileupholdingthebasicallyconservativeapproach relating to the effect of the Constitution established in Betta Eiendomme,overturningbothRoss and inpartBetta Eiendomme. The majority of the court held, contrary toBetta Eiendomme, thatSection�6(3)wasnotofverticalapplicationonlyandthatincasesofthisnature,anevictionordermayonlybegrantedoncetherelevantcircumstances have been considered. For purposes of Section �6 (3), the relevantcircumstances,accordingtotheSCA,arecircumstancesthatarelegallyrelevant,ratherthanthepersonalcircumstancesofthepersonfacingeviction,includingtheavailabilityofalternativeaccommodation.However,italsodecided,contrarytoRoss,thatSection�6(3)didnotgrantthecourtsadiscretiontodeprivethelandownerofanevictionorderthats/hewouldotherwise–intheabsenceofastatutoryorotherrighttooccupy–have

�4

beenentitledto,basedonthepersonalcircumstancesoftheoccupierandhis/herfamilyortheavailabilityofalternativeaccommodation.Thecourt’sdiscretiontorefusetograntanevictionorder,wheretheownerisotherwiseentitledtosuchanorder,isnotconferredonthecourtsbySection�6(3).Consequently,intheabsenceofastatutewhichexplicitlyconfers an equitable jurisdiction on a court, and, except insofar that right is limited by the Constitution,anotherstatute,acontractorsomeotherlegalbasis,anownerisentitledtopossessionofhispropertyandanevictionorderagainstapersonwhooccupieshispropertyunlawfully.31

ItisimportanttonotethatthecourtinBrisleydidnotmakeclearwhichothercircumstances,besidestheapplicant’sownershipandtherespondent’soccupation,couldbetakenintoconsideration.3�

TheSCAhasrecentlyappliedBrisley in thematterofCity of Johannesburg vs Rand Properties (Pty) Ltd and Othersag, and although Harms ADP confirms that it was not invited torevisit Brisley, it has not found anything in the Constitutional Court jurisprudence to suggestthatitwaswronglydecided.QuestionsthathavenotyetbeenaddressedbytheConstitutionalCourtarethemeaningoftheterm‘relevantcircumstances’andwhetheracourthasageneraldiscretionafterhavingconsideredthe‘relevantcircumstances’.Sachs J’s comments in Port Elizabeth Municipality vs Various Occupiers34, althoughostensiblyaninterpretationofthePIEAct,aresuggestiveoftheimpactthatSection�6(3)oftheConstitutionmayhavewheretheActdoesnotapply.Theboundariesofthecourt’sdiscretion,howeverunderSection�6(3),arestillevolvingandthequestionofthecircumstancesunderwhichthecourtsexerciseanequitablediscretionintermsofthesubsectionisunresolved.35

Therighttohousingisthuselaboratedthrougharangeoflegalframeworksthatcontinuesto be refined in our young democracy.

2.3 Other processes to address housing issues in South Africa Inadditiontothelegalframeworks,avastrangeofprocesseshavebeenundertakentoaddresstherighttohousinginSouthAfrica:

• TheNationalHousingForumin1994washeldtodealwiththepaymentboycottsinheritedfromthe1990sanddevelopedhousingpolicypaperstoinformpolicyandlegislation;

• The National Housing Summit in 1994 facilitated commitments by banks in thehousingdeliverychain;

• TheWhitePaperpromotedpeople-centreddevelopmentandnon-discriminationinhousingdelivery;

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• HousingInstitutions,suchastheNationalHousingFinanceCorporation,weresetupto provide wholesale housing finance and the Home Builders Registration Council to dealwiththequalityofworkmanship;

• Servconwasestablishedin1994asapublic-privatepartnershipbetweengovernmentandthebankstoaddressabout33306homesthatwereatriskofbeingrepossessed.The programme included converting mortgages to rentals and rightsizing. Themandateextendedfrom1996to�006andmostofthecaseswereresolved.80%of the properties that were not normalised were in the areas mentioned in thehearings;

• AMortgageIndemnityFund wasinstitutedin1995withthegovernmentagreeingtounderwritecertainrisks;

• TheOmbudsmanforbankingserviceswasestablishedin1997.TheOmbudsmanrequiresthatbankshighlightnon-vacantrepossession.Theombudsmanprovidesalastresortpriortolegalactionagainstthebank;

• In�003thebankingsectorformedtheFinancialSectorCharter. TheChartersetupProject Sizwe toestablishbestpracticeinlendingtolowincomehousing;

• AHomeLoanCodeofConduct wasincorporatedin�004intothebankingcodeofpractice;

• In January �006 a Code of Practice for Emerging Home Loan Markets, which isaimedatborrowersindistress,wasdeveloped;

• InJuly�007theNationalCreditAct(NCA)wasimplemented.TheNCAintendstoensure responsible lending by enforcing a rigorous credit assessment regime onlenders.

Chapter 3: Community Issues

�7

3.1. IntroductionThechallengesindeliveryontherighttohaveaccesstoadequatehousinghighlightconflicting interests between different groups. With the Department of Housing focusingonhousingthepoorestofthepoorwhohaveneverownedahouse,newchallengesareemergingforthosewhooncewereabletoaffordabond,butduetochangingcircumstancesarenolongerabletodoso.Thehearingsprovidedevidenceofhowevictionscreatetensioninthecommunitiesandfurtherentrenchthecycleofpoverty.Inaddition,anareawithhighlevelsofdefaultingonbondsdiscouragesbanksfrominvestingintheareaandthuscontributestofurtherdepreciation.Thefollowingchapteroutlinesthekeyissuesthatemergedfromtheoralandwrittensubmissionsbycommunity-basedorganisationsandindividuals.

3.2. Flow Chart of the Eviction Process (Page 28)The following flow chart broadly outlines how community members experience the processofevictions.Itoutlineswhichroleplayersarerelevanttoparticularstagesoftheevictionprocess.Communityallegationssuggestedirregularitiesatanumberofstagesintheprocess.

‘We know we are defaulters; people don’t have jobs and that’s why our people have becomedefaulters.’EnnerdaleHousingCrisisCommittee

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Pre-default Stage

• Terms and conditions of granting finance;• Reasonsforsubsequentdefaulti.e.lossof employment,death,illnessandsoforth;• Attemptsmadebycomplainantstosettle orenterintorepaymentarrangementswith financial institution once in default.

Institution of Legal Process Stage

• Deliveryoflettersofdemand;• Serviceoflegalnoticesinformingthecommencementoflegal process;• ConductofSheriffsoftheMagistrates’orHighCourts;• Court proceedings i.e. conduct of presiding officer;• Lackofrepresentationatcourtproceedings• Serviceoforderofcourtforeviction;• ConductofSheriffs;• Evictionprocess;• ConductofSheriffs,EstateAgentandSAPS;• Saleinexecution;• ConductofEstateAgentsi.e.bulkbuying,sellingproperties while awareofillegaloccupationandsellingthesame propertiestomorethenonebuyer;• Criminalproceedingsfollowingevictionshouldcomplainant remaininillegaloccupation.

Post Eviction

• Rehabilitationprocess;• Rightsizing;• Illegalreoccupation

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3.3. Pre-default StageHistoricalFactorsCommunityinputsatthePublicHearingsspokeofhowcommunitiessuchasKathorusandEnnerdalewereaffectedbyviolenceintheearly1990s.Propertywasdamaged,and in turn this led to displacement as people fled the area. These ‘vacant’ houses were thenillegallyoccupied.

After the new government came into power, a special presidential project was launched to normalise the area. With government support, houses were repaired. Communityrepresentativesatthehearingsallegedthattherewaspoorworkmanshipandthatsomeof the repairs were not completed. In addition, people whose houses were illegallyoccupiedduringtheviolencewerenotgiventheirpropertiesback.Furtherconfusionwascreatedwiththeperceptionbeingthatbankshaveclaimedhousesthatwererepairedbythegovernment.

LackofunderstandingoflegaldocumentsandprocessesAspeoplearedesperatetoobtainmortgagesandtobecomehomeowners,documentsaresigned even if the implications and the fine print are not fully understood. The documents are often in languages that the purchaser does not understand. Documentation ofpaymentsmadeisoftennotretainedandthusthereisnoproofwhendisagreementsemerge.

Anumberofinstancesemergedwherecommunitymemberswereundertheimpressionthat they had purchased houses only to find themselves facing eviction. In Kathlehong, thecommunitybelievedthathousespreviouslyownedbyTransnethadbeenboughtbytheemployees,butsomearenowfacingeviction.

ConfusionalsoemergedwithmortgagesheldbySAAMBOU.WhenSAAMBOUcollapseditwasnotcleartomanybondholderswhichbanktheyhadtoservicetheirbondwith.

Insurancetermsarenotalwaysunderstood.Thisisparticularlythecasewhenthereisadeathofthehomeowner.Otherfamilymembersassumethatthepropertyispaidoff,butlaterdiscoverthatthebondpaymentsareinarrears.

‘I moved into my house in 1994 as a bond house. I lost my job in 1998 and then discovered that the house was on auction. I got some part-time jobs so agreed to rent theproperty.From1998 to�004 thehousewasonsale. Inbetween,everyJackandJillcansayingthattheyhadboughtthehouseandweredemandingrent.’ThisresidentfromLawleyowedR40000onthehousewhenitwasrepossessed.Abulkbuyerpurchasedthehouseandofferedtosell itbacktohimatR�00000.

LawleyHousingCrisisCommittee

30

Thelegalprocessiscomplicatedandoftennotunderstoodbycommunities.Communityrepresentativescomplainedthatpoorandunemployedpeoplearenotalwaysawareoftheirrights,alternativesandrecourse.Legalaidisnoteasytoaccessincivilclaims.

Somecommunityleadershaveadvisedpeoplefacingevictionproceedingstoignorecourtprocesses.Thisispooradviceasitunderminestheirpositioninanylegalprocess.

ReasonsfordefaultsTherising interestrateshavebeenafactor indefaultingonmortgages.Somebanksoffer fixed rates for a certain period of time, but most are charging variable rates which have risen consistently in the past few years. Emerald van Zyl, a financial consultant, isoftheopinionthattheinabilitytoaffordbondsislinkedtobankssometimeschargingconsumers6%to7%abovetheinterestrate.Inhispresentationhesaidthatcalculatingtheinterestinadvancecontravenesthelaw,butwasstillinpracticeinsomebanks.Headdedthatsomebanksincreasethebondwhentheinterestrateincreases,butdonotdecreaseitagainwhentheratedecreases.

The communities allege that the most commonly cited reason for defaulting wasunemploymentand/orreducedincome.Otherfactorsleadingtodefaultsincludemedicalexpenses,increasedlivingexpenses,death,divorceanddisability.

Over-extendingSomepeopleweregivenhousesbythemunicipalityandthentookout loanstobuildextensionsoroutbuildings.Uponinabilitytopaytheloans,theyhavelosttheirhouses.Thishasaffectedelderlypeoplewhoseyoungerchildrenhavesecuredtheloansbyusingtheirelderlyparent’shouseascollateral.Insomeinstances,theGautengDepartmentofHousinghasintervenedtopreventelderlypeoplefromlosingtheirhouses.

Anotherfactorraisedbycommunityrepresentativeswasthatoccupantsinvestinhomeimprovementswhicharenotfactoredinwhenthehousesarerepossessed.

VulnerablegroupsThe eviction of vulnerable groups such as orphans, people with disabilities and theelderlyemergedat thehearings.Withmanychildren losing theirparents toHIVandAIDS,theyarelosingtheirinheritanceastheyarenotawareoftheirrights.Otherfamilymemberstrytopossessthehouses.

AttemptsmadebycomplainantstosettleCommunity submissions reported on confusion over settlement agreements. Someindicated that even when payment arrangements had been made, the houses wereputupforsaleinexecution.Othersdidnotrealisethattheyhadenteredintoarentalagreementandwereundertheimpressionthatthepaymentsbeingmadeweretowards

31

abond.Someofthecommunitysubmissionsimpliedthatbanksarenotoperatingongoodfaithandthattheysayonethinganddoanother.Communitysubmissionswereconcernedthatevictionproceedingswillbeginwhiletenantsarestillinnegotiationontheirarrears.

3.4. Institution of the Legal ProcessLegalNoticesCommunitiesreportedthattheyoftendidnotreceivelegallettersandnotices.Othersreportedthatcommunitymembersdidnotunderstandthecontentoftheletters.Communitysubmissionsraisedconcernatthemannerinwhichattachmentsaredelivered.Althoughitislegaltoattachthemtoanexteriordoor,thiswascitedasthereasonthatmanydonot receive notification of legal action against them. It was also mentioned that it was unlikelythattherewouldbenooneatthehousetoreceivethenotices,particularlyiftheownerwasunemployed.

CourtproceedingsItwasfoundthatinmostinstances,thepersonbeingevicteddoesnotappearincourt.Thisisduetoanumberoffactors,includingtheabovementionedissueofnotreceivingnotices.Inaddition,mostcommunitymembersareunabletoaccesslegalrepresentationandarethusatadisadvantage.

EvictionproceedingsThecommunitysubmissionsspokeofthemannerinwhichevictionsareconducted.Oftenthecommunitymobiliseinsupportoftheoccupant.Thiscanleadtoviolentaltercationsbetween occupants, new buyers and those doing the evictions. These submissionsincludedallegationsofgrossmisconductbySheriffs, the redantsandSAPS. Itwasallegedthathosteldwellersandprivatesecuritycompaniesareinvolvedinevictions.

AdditionalallegationsincludedsellinghousesatnominalamountsandsellinghousestotheSheriffs.Sheriffswereaccusedofnotallowingtheoriginalownerstobuytheirhousesback.

CommunitysubmissionspaintedaconcerningpictureoftheroleoftheSAPS.ItwasallegedthatthosebeingevictedwerenottreatedhumanelyandthattheirbelongingswerestolenandsoldbySAPSmembers.CommunitysubmissionsallegedthatSAPSmembersarerewardedforconductingevictionsbynewhomeowners.

ConductofEstateAgentsandBulkBuyersAllegationsagainstbulkbuyerswerethat theyrefusedtoofferoccupants theright torepurchasetheirhomes.Bulkbuyersseemedtochangeregularlyandcreatedconfusionamongstoccupantsastowhorentalshouldbepaidto.Allegedbulkbuyerswereattributedwithtakingillegalmeasurestoensureevictions.

3�

AccordingtotheEnnerdaleCrisisCommittee,‘thebiggestdevilsarethebulkbuyers.Theyneed tobe regulated.’Bulkbuyersweredescribedas ‘whiteguyswithmoney’who‘useblackbrothersasEstateAgents.’Bulkbuyersweredescribedascompaniesthatbuyupmanyproperties.Itwasallegedthatbulkbuyersforgeevictiondocuments.A SAPS speaker affirmed that when all documents were verified with the courts, the evictionratedecreased.

The conduct of EstateAgents came under scrutiny with community representativesallegingthatEstateAgentsaresellingoccupiedhouses.ItwasallegedthatbogusEstateAgentscollect rentalswithout theoccupantknowingwhothecorrectownersareandwhorentshouldindeedbepaidto.

EvictionswherethereisnoconsultationonthealternativesbeingofferedInProteaGlenitwasallegedthattherewasnoconsultationonwherethecommunitywouldbemovedtointheeventofevictions.

CriminalproceedingsforthoseremaininginillegaloccupationAsmanyfamilieshavenowhereelsetogo,somereturntothepropertyfromwhichtheyhavebeenevicted.Itisthenthattheyareoftenarrestedfortrespassingandimprisoned.Atthehearings,itemergedthatsomecommunitymembersdidnotunderstandthatitislegaltogetarrestedfortrespassing,evenfromahouseconsideredone’shome.

3.5. Post EvictionConsequencesofevictionsThose who have been evicted were described as traumatised, particularly children.Community submissions identified evictions as contributing to poverty, crime and homelessness.Familiesareoftenseparated.Withevictionscontributingtothecycleofpoverty, it was identified that they could contribute to increased demand for government grants,medicalservicesandshelters.

Asmostcommunitymembershavenotbeenofferedalternativessuchasrightsising,36theonlyinevitableconsequenceofsuchanevictionislivinginaninformalsettlementorbeinglefthomeless.

Chapter 4: Role Players

34

ThischapteroutlinestheissuesthatemergedinthePublicHearingsastheyrelatetoparticularroleplayersintheprocess.Thechapterincludestheresponsesbyeachroleplayertotheallegationsagainsthim/her.

4.1. Role of BanksThePre-LegalandLegalProcessAllofthebanksthatmadesubmissionsatthePublicHearingsemphasisedthattheyfocusonmakingarrangementstomakeupthearrearsratherthanpursuethelegalavenue,assubstantiallossesareincurredduringtherepossessionandresaleprocesses.Theprocesspriortoasaleinexecutionorevictionformostbankswasfairlysimilar.

Adefault client is regardedasonewho is indefault ofoneormore instalments.Anaccount that is90days inarrears is regardedasanon-performing loan.During thisphase,a‘soft’collectionprocessisundertaken.Thisisdonemostlyonthetelephone.Arrangementsinclude:

• amoratoriumonbondinstalmentsifavalidreasonexists;• higherinstalmentstomakeupthearrears;• foralimitedtime,partialorinterest-onlypaymentscanbemade;• reducedinstalmentsbyextendingthetermsoftheloan.

Ifthepersonisunabletomakeanarrangementwiththebank,theyareencouragedtosellthepropertyvoluntarilytorealisethemarketvalue,ratherthananauctionsalevaluewhichisnotconcludedundernormalmarketconditions.Thisispromotedtoavoidthecostsofthelegalprocess,listingwithcreditbureausandaccruedinterest.

Accordingtobanksubmissions,itisimportanttobeginthecollectionsprocessassoonasdistress isdetecteddue to theextentof the loan.Theconditionof theassetcandeteriorate as the borrower’s financial position worsens. The resale value declines, ratesandtaxesfallintoarrearsandthelegalcostsincurredareaddedtotheborrower’saccount.

Thebank’slegalprocessinvolvesittothepointofthesaleinexecution,andformostbanksthisiswheretheydepart.Thebanks’submissionsindicatedthatitislargelythirdpartiesintheformofnewownersandbulkbuyerswhoinstituteevictionproceedingstoensurevacantoccupation.Thebanksindicatedthattheytrytoencouragebulkbuyerstosell the properties back to the original owners, but that it was difficult for previous owners to refinance the property.

Ifthepropertygoestoasaleinexecutionanddoesnotfetchthereservepricedeterminedbythebank,thebankwillbuythepropertyin.ThisiscalledaPropertyinPossession(PIP).Contrarytowhatwasallegedbycommunityvoices,allofthebanksallegedthatevictionsbybanksareanexceptiontotherule.

35

DefaultratesintheareasunderinquiryFor Nedbank, in the areas mentioned in the inquiry, there is a 10-15% default rate.StandardBankreportedthatthedefaultrateintheareasunderinquirywerehigherthanotherareas.ABSAreportedthat34%haddefaulted,whichishigherthanthenationalaverageof1�%.ForStandardBank,about10%oftheloansintheareasunderinquiryhadledtolegalproceedingsbeinginitiated.FNBreportedthatabout30%ofloansintheareashadbeeninarrears,butthatmostwereresolved.AccordingtoABSA,‘affordablehousingcustomersdomeettheirobligations…theaveragevalueofpropertyboughtinbythebankisR800000toR1million.Itisnotthelowincomemarketwherepropertiesareboughtback.’

Resellingtopreviousowners/occupantsAs many previous owners have difficulty in securing finance, reselling the property back to them can be difficult. Some banks claimed that occupants are uncooperative. They allege that banks illegally repossess their homes.Another inhibiting factor canbeoutstandingrates,taxesandmunicipalservicesbills.ABSA,throughitsInstalmentSaleproduct, is facilitatingex-owners to repurchase their housesand restoring theirrelationshipswithmunicipalitiesbyarrangingforoccupantstosignanacknowledgementofdebttorestoreservices.

EffectiveconsultationTheBankingAssociationacknowledgedthatthereisalackofunderstandingonissuesof borrowing and lending, financial planning and awareness of channels of redress. To address this,aneducationalprogrammewas fundedby the industry in the formofaSETA37programmetotrainbankingstaffonthelowincomehousingmarket.

LackofconsumerprotectionUndertheUsuryAct,theDirectorateofLicensingandInspectionsisrequiredtoundertakeproactive inspections on financial institutions to ensure consumer protection. According toEmeraldvanZyl,thishasnothappened.38Thefocushasbeenoncomplaintslodged.Governmentviewsbanking issuesasaffectingasmallwell-educatedminoritygroup.However the new group of low income mortgage holders accessing finance has not beentakenintoconsideration.

InitiativestoimprovelendingtolowincomehomeownersProject Sizwe is a partnership with government to facilitate market penetration. The project has looked at the possibility of creating a long-term fixed interest rate underpinned byagovernment or private sector non-commercial risk. It looked at providing life ordisability cover policies to HIV/AIDS positive applicants with access to anti-retroviralmedication. It was expected that 850 000 families will benefit by means of purchase or improvementstotheirhomesfrom�004to�008.

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The Code of Practice for Emerging Home Loan Markets emerged when it was identified that there was a gap in providing a transparent, caring and standardised approachby banks in respect of default and repossessions. The code is specifically aimed at households in financial hardship. Banks started implementing the code from January �006.

The Loss Insurance Project was initiated in July 2007. The project includes possibly establishingagovernmentorprivatesectornon-commercialriskwhichwouldunderpinhomeloanswithintheFinancialSectorChartertargetmarket.Itmayalsoleadtothecreation of an affordable long-term fixed interest rate for the Financial Sector Charter targetmarketandanaffordableretrenchmentinsurancepolicytoassisthomeownersinthe event of job loss. A life, disability or retrenchment insurance policy may be embedded withinaborrower’shomeloanrepayments.

BankingterminologyfordefaultingAlthoughthebankingindustryclaimstofollowtheletterofthelaw,bankingterminologyrelatedtodefaultersisvalue-laden.Terminologysuchas‘rehabilitation’,‘curing’debtsand‘delinquency’wouldindicatethatdefaultingisviewedeitherinmedicalorcorrectionalterms.Thiscouldindicatealackofunderstandingofthedeep-seatedpovertyfacingmanyhouseholdsandthedailystrugglestosurvivethathavelittletodowith‘badbehaviour’associatedwithdelinquency.Itispossiblethatthislanguagecouldcontributetowardsnegativeattitudes to low incomecustomers.TheBankingAssociation’s researchhasfound that low income housing applicants were not satisfied with service levels. It was thisresearchwhichledtothedevelopmentoftheCodeofPracticeforEmergingHomeLoanMarkets.

ConsequencesofevictionsAccordingtoStandardBank, the low incomehousingmarket isnotnormalising.Lowincomecommunitiesarenotseeinganescalation in theirpropertypricesand this isimpactedonbyevictions.ABSA’ssubmissionindicatedthatmostpropertiessoldtobulkbuyersarethosewithuncooperativeoccupants.

A consequence for other low income purchasers is the inability to obtain vacantpossession.ABSAassistssomenewhomeownerswhenthedelayinobtainingvacantpossessionbecomesprotractedandthenewhomeownersareunabletoaffordboththemortgageandtherentalcostsoflivingelsewhere.ABSAhasalsoassistedpurchasersbybuyingthepropertybackandattemptingtorenegotiatewiththeoccupants.

TheBankingAssociationconcludedthatalothadbeenachievedsince1994andthattherewerepolitical,moralandsocialreasonstomaketheemergingmarketwork.Itreiteratedthatbanksarebusinessesandarenotinapositiontodealwithissuesofunemploymentandaffordability.AccordingtoCasCoovadiaoftheBankingAssociation,

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‘we must move away from the perception that banks give away housing finance without making a profit. They are not going to do that.’

4.2. Role of the courtsAlthoughtherewasnorepresentativefromthecourtsat thehearings, theroleof thecourts was identified as key to ensuring fairness in these processes. It is the court that makestheevictiondecisionbasedontherelevantlegislation.

TheSABoardofSheriffs,actingasmessengersofthecourt,suggestedthatthelegalprocessisprocedurallycorrectbutquestionedwhetheritisfairtoeverybodyinvolved.They follow the rules of court but the results are often harsh to the disadvantaged.When the person is not present in court, a default judgment is awarded with far-reaching consequences.Inacriminalmatter,iftheaccusedisnotincourt,thematterispostponed,butinacivilmatterdecisionsaremadeintheabsenceofthedefendant.Legalassistanceis not afforded to civil matters by the state and yet can be extremely technical and difficult tounderstand.Theunrepresenteddefendantisatadisadvantage.

Prior to 1994, there were legal advice offices in communities, but these are no longer there. The SA Board of Sheriffs allege that presiding officers often do not consider whethermunicipalitiesareprovidingalternativeaccommodation.

4.3. Role of SheriffsOncethecourthasorderedtheeviction,itishandedovertotheSherifftoimplementthecourtdecision.TherewerenumerousallegationsagainstSheriffs,withsomecommunitymembersdescribingSheriffsas,‘alawuntothemselves.’InEnnerdale,itwasallegedthatsheriffsacceptbribestoallowpeopletoreoccupytheirhousesoncetheyhavebeenevicted.

Additionalallegationsincludedsellinghousesatnominalamountsandsellinghousesto thesheriffs.Sheriffswereaccusedofnotallowing theoriginalowners tobuy theirhousesback.InthewrittensubmissionfromFNB,itwaspointedoutthatSheriffs’earn10%onthesaleofanauctionuptothemaximumfeeofR7000(animpliedvalueofR70000).BeyondthepriceofR70000,theSheriffhaslittleincentivetopromotetheproperty,thuspropertiesmaynotfetchtheirtruemarketvalue.

TheSABoardforSheriffsrespondedtotheallegationsandsuggestedthattheproblemresides in the legal processes not being understood by the public. Sheriffs find themselves at the intersectionof thecourts,SAPS, thenewownersandoccupants,allofwhomhavedifferentneedsandinterests.

Sheriffs face a difficult situation as they become the face of the eviction at the community levelandareheld responsible for themiserycaused throughevictions.Submissions

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from Sheriffs’ working in the areas under inquiry spoke of violence and intimidationbeingexperiencedbySheriffstryingtoexecutetheirduties.Respondentsoftenrefusetoacceptthedocuments,believingthattheywillthennotbeaffected.Uponcompletinganeviction,Sheriffsoftenfoundthehousesimmediatelyreoccupied.

Relying on the SAPS is an additional challenge as it was alleged that some SAPSmemberstipoffthecommunity,thusallowingthecommunitytimetomobiliseresistance.BecauseSAPSmembersliveinthecommunity,theyarereluctanttobeassociatedwithevictions; this in turnhas led todelays.Thishas led tosomeSheriffsusing theRedAnts.

TheSABoardforSheriffswasawareofpeoplepretendingtobeSheriffsandwasalsoawareofpeopletakingthelawintotheirownhandsinanefforttoreclaimtheirpropertyandsavecosts.

TheSABoardforSheriffsrecognisedthatpropertiescanbesoldforaslittleasR100,butthiswasusuallywhenthemunicipalrates,taxesandservicearrearswereveryhigh.

Attempts to improve relationships with communities have been undertaken throughcommunitymeetings.InProteaGlen,thishasresultedinSheriffsnolongerusingtheRedAnts.

4.4. SAPSCommunitysubmissionspaintedapictureofaninsensitiveSAPSwheretheyallegedthatthosebeingevictedwerenottreatedhumanelyandthattheirbelongingswerestolenandsoldbySAPSmembers.CommunitysubmissionsallegedthatSAPSmembersarerewardedforconductingevictionsbynewhomeowners.

Ontheotherhand,theSABoardforSheriffsreportedthattheSAPSisreluctanttogetinvolvedinevictionsasmembersliveinthecommunityanddonotwanttobeassociatedwiththesufferingcausedbyevictions.

TheSAPSsubmissionindicatedthattheroleoftheSAPSinevictionsistofacilitatelawandorderduringtheoftentenseevictionprocess.TheSheriffapproachestheSAPStoassistwiththeimplementationofthecourtorder.EvictionsdonebytheSAPSandtheSheriffsareconductedduringthedayandthusthecommunity’sallegationsofevictionsconductedbytheSAPSatnightwouldrelatetoillegalevictions.

CommunitysubmissionsallegedthatarrestsfortrespassingwouldtakeplaceonFridaysto ensure that the person will be jailed for the weekend. SAPS responded that arrests fortrespassingweredonewhenpeoplehadmovedbacktothepropertyafteralreadybeingevicted.

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The SAPS submission acknowledged that they are aware of illegal evictions takingplace,ashomeownersgetfrustratedthattheywerepayingbondsforhomesthattheywereunabletooccupy.TheSAPSwasalsoawarethatsomeEstateAgentshaveusedhosteldwellerstoassistinillegalevictions.

FalsedocumentshavebeenpresentedtotheSAPSwheretheoriginalwasscannedandthenamesanddateschanged.SincetheSAPSstartedverifyingthecasenumbers,the eviction rates have dropped. The same has been found with trespassing caseswhereEstateAgentsmadeupoffalsetrespassingwarrants.

TheSAPShasfoundthatinmostevictioncases,occupantshaveneverbeentocourt,didnotknowthedateofthehearingandhadnotbeengivenachancetostatetheirsideofthestory.

ItwasallegedthattheSAPSarerewardedforassistingwithillegalevictions.Accordingto theProteaGlenResident’sAssociation, ‘thepoliceare talkingwithsweet tongueshere,butnotontheground.’TheSAPSencouragedcommunitymemberstoreportanyunlawfulconductbySAPSmembers.

4.5. Role of Estate Agents The EstateAgencyAffairs Board reported that it received few complaints of EstateAgentsbeing involved inevictions.ThiscouldbebecausecommunitiesdonotknowabouttheBoardorthatEstateAgentsarenotinvolvedinevictions.

Complaintshavebeenreceivedwhenpropertiesareboughtbutarealreadyoccupied.Thenewowner thenhas topay thebond, ratesand taxesand rentalwheres/he isstaying,plustheexpenseofanevictionprocess.SomenewownerswerepromisedbytheEstateAgentthatthepropertywouldbevacantwhentransfertakesplace,butEstateAgentsarelegallynotabletoapplyforanevictionorderintheircapacityasagents.

TheEstateAgencyAffairsBoardhaslimitedpowers.ThereisanEstateAgentscodeofconduct,buttherecourseandcompensationareminimal.TheBoardcanwithdrawtheagent’s fidelity fund certificate or impose a fine of up to R25 000.

Thepublicisoftheviewthatthesesanctionsdonotofferthemasolution.

4.6. Bulk BuyersTheissueofbulkbuyerswasraisedconsistentlyduringthehearings.Althoughbanksareawareofwhomthebulkbuyersare,theybecameaphantompresence,astheywerenotrepresentedatthehearings.

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Banksmentionedthattheydidsetpreconditionswithbulkbuyerstogivethepreviousownerstheoptiontorepurchasetheirhouses.Thereishowevernomechanismtoensurethat this is adhered to. It is also difficult to implement as those occupying the houses have difficulty in accessing finance as they are often listed on the credit bureau once theirpropertyisattached.

4.7. Role of GovernmentAlthoughgovernmenthasmadeenormousstridesinhousingdelivery,themagnitudeofthe need was reflected through the hearings. Community submissions painted a picture ofgovernmentasinaccessibleandunresponsive.

ProvincialDepartmentofHousingTheGautengDepartmentofHousingsubmissionspokeofthechallengesindealingwiththehousingbacklog.TheDepartmentshouldprioritisehousing for thepoorestof thepoor–thosewhoareunabletoaccessbondsatall.

SERVCONAprogramme thatwasdesigned toassistwithbonddefaultswasServcon.Servconwasestablishedtonormalisethehousingmarketinareasthathadfacedrentboycottsandabreakdowninlawandorder.Itsmandatewastoprovideexclusivemanagementservices with respect to 33 306 properties in possession and non-performing loans.Servconcoveredanumberofareasbeingaddressedintheinquiry.Servcon’smandatewaslimitedfrom1996to�006.

ServconProgrammesincluded:• Reschedulingprogramme(buyback) for thoseable toafford tobuy theproperties

back;• SubsidisedRentalProgramme–a rentalamount toassist theoccupant to repay

afteraperiodofnon-payment;• Rightsizing-offeringtheoccupantsReconstructionandDevelopmentProgramme

(RDP)housinginexchangeforthemvacatingtheirhouses;• Specialassistancefortheagedandthedisabled–providingin situ rightsizingwithout

theoccupanthavingtorelocate.AccordingtotheGautengDepartmentofHousing,thecontextthatgaverisetoServconnolongerapplies.ThoseabletoaffordbondsarenotapriorityfortheDepartment.Abondwasseenasalegallybindingcontractbetweenthepartieswithrightsandobligationsonbothparties.Manypeople,eagertogettheirhouses,donotreadorunderstandtheimplications of the fine print in contracts.

ProtectingtheElderlyTheDepartmenthassubmittedthattheyhaveintervenedinsituationswherethechildrenofseniorcitizenshavetakenoutbondstobuildbackroomswiththehouseoftheolder

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personusedassurety.Whenthechildrenareunabletopay,thebankattachesthewholehouse.TheDepartmentisnegotiatingwithbanksinsomeoftheseinstancestoacceptalimitedsubsidyofR�5000andtowriteofftherestoftheloan.

PreventingEvictionsthroughSubsidiesNegotiationswithbanksareunderwaytopreventevictionsbyofferingsubsidies.TheDepartment is also working with municipalities on arrears in rates and taxes. Thisapproachisdivertingfundsfrombuildingnewhouses.TheDepartmentcurrentlyonlyprovides subsidies to first time homeowners, but some of the criteria can be relaxed ifthecasehasmerits.Specialcasesincludethoseaffectingtheelderly,childheadedhouseholdsandothervulnerablegroups.DiscussionsareunderwaywithNedbankondeceasedestateswheretherearechildheadedhouseholdsorpensioners.

Conflicting InterestsThe Department noted that it was important to address the differing needs of allstakeholdersortherewon’tbeprivatesectorinvestmentinthelowerendofthemarket.TheDepartmentwantspeople to take responsibility for their ownobligations, and istherefore reluctant to step inand takeover their obligations. In thepast, therewereredlined areas which have now been normalised. The Department wants people tohonourtheirresponsibilitiestoensurethatthegainsmadeinnormalisingthemarketarenotlost.TheDepartmentdidnotconcurwithStandardBankthatthelowincomehousingmarketisnotappreciatinginvalue.

TheDepartmentacknowledged that thosewithchallengeson theirbond repaymentsareexploitedbyEstateAgents,Sheriffsandotherbondvaluechainparticipants.TheDepartmentexpectedthatwiththeNationalCreditAct,casesofdefaultandevictionswouldbeminimised.

MunicipalitiesTheroleofmunicipalitieswasnotexploredindetailduringthehearings.Accordingtosection4 (�)of thePIEAct “thecourtmust servewrittenandeffectivenoticeof theproceedings on the unlawful occupier and the municipality having jurisdiction”. Clarity on the role of municipalities in providing alternative accommodation was identified as an issuethatrequiresattention.

TheNationalDepartmentofHousingTheNationalDepartmentofHousing is key to these issuesas it isat this level thatpoliciesareset.

Chapter 5: Findings and recommendations

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Thelegalprocessprovidesaminimumstandard,howeverinthespiritofUbuntu,weexpecttheroleplayerstodomoretoamelioratetheplightofthepoor.

The representatives of the communities alleged that the service providers (banks,propertyagencies,Sheriffs,SAPSandthecourts)lackthisimportantvalueofUbuntu.TheconceptofUbuntuispremisedontheprincipleof‘umuntu ngu muntu nga bantu‘whichtranslatesinto,‘I am because you are or you need me in as much as I need you, therefore let us take care of each other so that we can continue to co-exist.’ ThisvalueisfoundinallSouthAfricanethnicgroupsandallSouthAfricanlanguages.

Tohighlightthispointanexampleshallbereferredtonow.ThevalueofthehousewasR60000atthetimewhentheownerbecameincapacitatedandwasunabletohonourhis/hercommitmentsintermsofthebond.Theserviceprovidersandstateinstitutionsevictedthefamilyregardlessoftheircircumstances.Theissuethatneededtobetestedagainst the values of Ubuntu was whether the service providers considered Ubuntuwhen they evicted the family who has been loyal to them for the past fifteen years, but due to poverty and death was unable to pay the last R10 000 spread over five years after it succeeded to pay R90 000 spread over fifteen years.

Thequestioniswhetherthebank,thecourt,theSheriffsandthebulkbuyersorpropertyagencies can be credited with upholding the values of Ubuntu when they jointly colluded through lawful legalprocesses toevict the family from thehouse, regardlessof theircircumstances,andthensellthehousetothebulkbuyersforR11000eventhoughthevalueofthehousewasR60000.

The values of Ubuntu call the service providers to look beyond the R10 000 that isneededbythebanktomeetitsR100000debt;Ubuntumeansthatbanksexistbecauseofthecommunityandthecommunityexistsbecauseofthebanks.Itstatesthatyourneighbourmaynotgotobedonanemptystomachifthereisfoodinyourhouse,itisnotaboutwhetheryoupaidforthefoodornot;italsoassertsthatthechildrenandwomenarevulnerableandanyonewhoisdealingwiththemshouldapplyspecialcautionnottoharmthemorputtheirlivesindanger,regardlessoftherelationshiporcircumstances.Itisagainsttheseprinciplesandvaluesthattheserviceproviderswereaskedtoexplaintheirconductwhendealingwithcasessuchastheonestatedabovewheretheywouldevicta familyanddumpchildren,sicklywidowsandgrandmotherson thestreetandthenselltheirhouseforapaltryR11000torecoverR10000eventhoughthehousewasvaluedatR60000.

The following findings and recommendations emerged from the hearings: 5.1. Government• It is essential to ensure that legislation, policies and processes are correctly

implemented;

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• The issue of evictions through bond defaulting appears to be systemic and thusrequiresacreativegovernmentintervention.Itisrecommendedthataprogramme

similartotheServconprogramme(seeparagraph4.7)bere-introducedtodealwiththeseissues;

• It may be necessary to review government’s policy of only assisting first-time homeowners;

• Local government was viewed as a key role player in dealing with the issue atcommunitylevelandthattheyshouldconsiderincludingtheprovisionofalternativeaccommodationforthoseleftdestitutebyevictionsintotheirIDPs;

• Governmentshouldconsiderwhetherthesuggestionbybanksthata‘lossofincomecover’bedevelopedasapartofthesocialsecuritysystemwouldbeaviableoptionto ensure that a significant asset like a home is not lost during unemployment or retrenchment.

5.2. Banks•Notwithstandingbusinessandhumanrightsbeingcompatible,banksshouldensure proper implementation of the triple-bottom-line approach, which ensures that thebusinessconsidersthecommunitiesandtheenvironmentinwhichtheb u s i n e s soperates;• Banks should consider whether the setting up of pre-conditions that would allow

potentialbulkbuyerstogivepreviousownerstheoptiontorepurchasetheirhouseisadheredtobyputtingmechanismsinplacetoensurethatthisisindeeddone;

• Whendealingwithcustomers,banksshoulddomoretoensureeffectiveinteractionwhichcouldincludeface-to-faceinteractionwiththeircustomers,andnotrelyingonlyonbusiness-liketelephoniccommunication;

• ItisrecommendedthattheBankingOmbudsmanshouldbeusedmoretodealwithconflict. In order to ensure that this happens, they should put in a greater effort to be moreaccessibletothepublic;

• Banks should consider offeringdeath insuranceand retrenchment cover for theircustomerswhofallwithinthelowerincomebrackets;

• Financial Institutions should consider funding the Housing Consumer ProtectionTrusttoensureitsre-opening;

• Itissuggestedthatprivateauctioneersbegiventheopportunitytosellhousesinsalesofexecution,astheyadvertisethesales,ensurethatthepropertyispresentableanddonothavealimittotheauctioneers’fees;

• It is recommended that banks should interrogate the prospective applicant forfinancing so as to prevent situations of over-extending of older persons.

5.3. Courts• It is recommended that the LegalAid Board should offer legal assistance in civil

casessuchasevictions;

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• TheRulesBoardshouldconsideramendingtherulesofservicerelatingtoevictionstoensureeffectiveservicesoastoaddressthecurrentdissatisfaction;

• Thelegislatureshouldfurnishguidelinesastowhatitconsidersrelevantcircumstances,as this would assist presiding officers in making such determinations;

• It is recommended that in situations where defendants appear unrepresented incourt, presiding officers should afford them an opportunity to address the court or, alternatively,obtainlegalrepresentation.

5.4. Sheriffs• It is recommended that when executing their mandate, the Sheriffs should at all

timesnotonlytreattheaffectedpeoplewithdignityandrespect,butalsoensurethattheydonotunreasonablycausedamagetothepropertyconcerned.Thisofcourseshouldalsoapplytoprivatesecuritycompanieswhenoperatingasagentsonbehalfofsheriffs,banks,municipalitiesand/orprivatepersons.

• TheSouthAfricanBoardofSheriffsshouldbemoreaccessibletothepublic.ThiswouldassistthepublicinknowinghowandwheretolodgecomplaintsofmisconductagainstSheriffs.

5.5. SAPS• InsituationswheretheSAPSaccompanySheriffstocarryoutanevictionorder,they

mustensurethattheyverifytheauthenticityoftheevictionorderwiththecourt;• In situations where the SAPS had to attend to the removal of people who are

trespassingundertheauspicesofanevictionproceeding,theymustinitiallyverifythe authenticity of the original eviction order. Should the order be verified, they should not only treat the trespassers in a dignified and respectful manner but also ensure thattheydonotunreasonablycausedamagetothepropertyconcerned;

• IncaseswheremisconductbymembersoftheSAPSisreported,theIndependentComplaintsDirectorateshouldensureeffectiveresolutionofthecasesreportedtoit;

• It is recommended that the SAPS should remain vigilant in apprehending thoseconducting illegal evictions and impersonating law enforcement officials.

5.6. Estate Agents• ItisrecommendedthattheEstateAgencyAffairsBoardshouldbestricterinenforcing

its disciplinary code against both registered and unregistered EstateAgents whocontravenetheEstateAgencyAffairsActanditscodeofconduct;

• It is recommended thatwhen registeredorunregisteredEstateAgentsare foundguiltybytheEstateAgencyAffairsBoardofcontraveningeithertheEstateAgentsAffairsActorthecodeofconduct,theEstateAgencyAffairsBoardshouldensurethatthenamesofsuchregisteredorunregisteredEstateAgentsarepublishedonaregularbasisinalocalnewspaper.

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5.7. Consumer Awareness and Understanding• It is recommended that all stakeholders should play an active role in promoting

consumer awareness and understanding of all aspects relating to the home financing process;

• Awareness and understanding should not only include clarification of the benefits containedininsurancepoliciesandwhetherthehousewillbepaidoffifthebondholderdies, but also include responsibilities such as: advising the financial institutions when their financial circumstances change; disclosure of financial obligations and other expensesassociatedwithhomeownershipsuchasratesandtaxes;

• Itisrecommendedthatalldocumentsrelatingtotheproposedpurchasingofpropertymustbereadandfullyexplainedtotheprospectivepurchaserinhis/herlanguageofchoice.

5.8. Participation• Itisrecommendedthatcommunitystructuresbeactivelyinvolvedinplayingamore

constructiveroleintheirinteractionswiththekeystakeholders.5.9. Monitoring • ItisrecommendedthataninstitutionsuchastheHousingConsumerProtectionTrust

berevivedsoas,inadditiontotheotherpowersithad,tomonitorandevaluatethehousingindustry,inparticularwhentherightsofvulnerablegroupsareatstake.

5.10. ConclusionThroughthisenquiry,theSAHRCtriedtobringattentiontothesystemicproblemsofthisaspectofhousing.Weare,however,notinapositiontoprovidehousingtothemillionsof people who have high expectations that they will be provided with housing. Thisinquiry specifically looked at the Lawley, Ennerdale and Kathorous geographic areas, but the Commission also received submissions from its Eastern Cape Provincial Office, ProteaGlenandGeluksdal,whichindicatethattheproblemiswidespread.

The Public Hearing earing on evictions, repossessions and housing revealed howcomplexthisissueisandraisedchallengesonhowbesttoensurethatrightsarenotinfringedinthedelicatebalancingactofcompetinginterests.ThesubmissionsoutlinedvariousprocessesalreadyundertakentoaddressthehousingissueinSouthAfrica,yetpeoplefeelthattheirconstitutionalrightsarenotbeingrealised.

ThePublicHearingsdemonstratedthepowerimbalancesbetweenlowincomeborrowersandtheotherplayersinthehousingenvironment.Thismeetingofunequalsisduetoalack of awareness, resources, understanding and confidence, which would include what recoursetheymayhave,insituationsofevictionsandrepossessions.

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ThePublicHearingsrevealedthatalothasbeendoneinadvancingtherighttohaveaccesstoadequatehousinginSouthAfrica,butalotmoreneedstobedonetoachievethis constitutional objective. It is essential that close monitoring of the implementation of legislationisundertakenbyallbodiestoensurethatthespiritofUbuntuprevails.

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Acknowledgements

Written submissions and documents provided

ABSA.‘SubmissiontotheSouthAfricanHumanRightsCommission(SAHRC).ABSABankExecutiveOverview:InquiryintoEvictions,RepossessionsandHousing.’8October�007.TheBankingAssociationSouthAfrica.‘InquiryintoEvictions,RepossessionsandHousing.’8October�007.GautengDepartmentofHousing.‘Enquiryintoevictions,repossessionsandhousing’18October�007.EnnerdaleHousingCrisisCommittee.‘BackgroundtoHousingCrisisinEnnerdale.’4October�007.EstateAgentsAffairs Board. ‘Inquiry into Evictions, Repossessions and Housing- EstateAgencyAffairsBoard’sPerspective.’9October�007.First National Bank. ‘FNB’s Reply to the Pre-Notification of South African Human Rights Commission’s PublicHearingintoEvictions,RepossessionsandHousing.’8October�007.LawleyHousingCrisisCommittee.‘SubmissiononbulkbuyersandSAPS.’October�007.Mnisi,M.‘ProteaSouthInformalSettlement’10October�007.Nedbank.‘SubmissiontotheSouthAfricanHumanRightsCommission:PublicHearingsintoEviction,RepossessionandHousing.’5October�007.Office of the Provincial Commissioner, South African Police Service Gauteng. ‘South African Police Service’sSubmissiontotheSouthAfricanHumanRightsCommissiononEvictionsbyBondDefaultersandtheAllegedAbusebytheirrightsByMembersofthePoliceService.’9October�007.ProteaGlenResident’sAssociation.‘InquiryintoEvictions,RepossessionsandHousing.’October�007.SA Board of Sheriffs. ‘Presentation by the SouthAfrican Board for Sheriffs to the SouthAfricanHumanRightsCommission.’8October�007.SAHRCEasternCape.‘EasternCapeReportforHousingHearings.’1October�007.Standard Bank. ‘Re: Pre Notification of South African Human Rights Commission’s Public Hearing intoEvictions,RepossessionsandHousing.’1October�007.Tsakane-Geluksdal Housing and Development Organisation. ‘Housing, Evictions, Arrest andViolationsoftheLaw.’�October�007.ResidentsofLawleyandEnnerdale.‘EvictionandHarassmentofCommunities.’October�007.

Oral submissionsDay 1, 7th November 2007Mr Pandelis Gregoriou, Legal Officer – Commissioners, SAHRCMr Moses Ngwenya and Teboho L Ncheke, Chairperson, Displaced Rate Payers Association(DRPA)MrCasCoovadiaandMrPrinceMaluleke,BankingAssociationofSouthAfricaMrFabianMackou,LesleyGreenandWillieTwala,EnnerdaleCrisisCommitteeMrEugeneDrotskie,DivisionalManager,NedbankHomeLoansMrJohannesMakweandGeorgeMpokela,LawleyHousingCrisisCommitteeMrOwenSorour,Director:SecuredLendingHomeLoans,VehicleandAssetFinance(VAF),StandardBankMrMondeMzimkhuluandReggieNkosi,SANCOLawleyMsRachelWall,GeneralManagerHomeLoansABSABankMrEmeraldvanZyl,FinancialConsultant,Bankgate

Day 2, 8th November 2007MrMariusMare,CEOHousingFinanceandMsJennyBritzManagerRiskandComplianceFNBHomeLoans,FirstNationalBankMrCheslinAmerica,ExecutiveManager,SouthAfricanBoardofSheriffsMs Alexandra Ledger, Legal Officer, Estate Agents Affairs BoardDirector Phefo, Office of the Provincial Commissioner of the SAPSMrEltonAnderson,DirectorofSTRBAttorneysMsPinkyHlabedi,ProteaGlenHousingCommitteeMr B. Monama Head of Department (HOD) and Ms Petal Thring, Chief Director, in the Office of the MECHousingDepartment,Gauteng

49

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End Notes

1. ThebriefhistoryisinformedbyCOHRE(�005),Any Room for the Poor? Forced Evictions in Johannesburg, South Africa, draft17February�005.�. Ibid, page 18.Ibid,page18.3. CareyMiller,D.L.(�000)Land Title in South Africa 1–4�;RobertsM.(1990)‘Dividing theLand:AnIntroductiontoApartheidLandLaw’inNo Place to RestChristinaMurray andCatherineO’Regan(eds)page1��–36.4. 1986(3)SA969(T).5. The possessor of an object is presumed to be the owner, if he is dispossessed against hiswillorwithouthisconsentbyillicitmeanssuchasviolence,fraudorstealth,heis thenentitledtogetacourtordercalledaMandament van Spolie whichordersthe dispossessor to restore the object to the applicant. A spoliation order is available to personswhohavebeendeprivedoftheirpossessionsorapartoftheirpossessions oroftheirrightsofpossessionthereof,onlywherethepossessionshavebeen transferredtothepersonresponsibleforsuchdispossessionandwho,accordingly,is inapositiontorestoresuch possessionstothepersonfromwhomithasbeen taken.SeeRDClaassenDictionary of Legal Words and Phrases(1997)Butterworths, Durban.6. An ouster clause is a provision in legislation excluding particular actions from judicial review.7. Nothavingthenecessarylegalstatus,validity,orpowersforthepurposeinquestion.8. Silberberg and Schoeman’s: The Law of Property (�006)Badenhorst,PJPienaarJM, andMostert,H(eds)atpage588.9. Roux,T.(1997)‘ConstitutionalProtectionofPropertyandLandReform’inAnnual Survey of South African Lawpage33�–55;Roux,T(1998)‘ConstitutionalProtection ofPropertyandLandReform’inAnnual Survey of South African Lawpage337–65; Roux,T(1999)‘ConstitutionalProtectionofPropertyandLandReform’inAnnual Survey of South African Lawpage318–46;Roux,T(�000)‘ConstitutionalProtection ofPropertyandLandReform’inAnnual Survey of South African Lawpage406–33; Euijen, M & Plasket, C (2001) ‘Constitutional Protection of Property and Land Reform’ inAnnual Survey of South African Law page 438 – 55; Euijen, M & Plasket, C (2002) ‘ConstitutionalProtectionofPropertyandLandReform’inAnnual Survey of South African Law page 526 – 32; Euijen, M & Plasket, C(�004)‘ConstitutionalProtectionofPropertyandLandReform’inAnnual Survey of South African Law page 391 – 395; Euijen, M & Plasket, C (2005) ‘Constitutional Protectionof PropertyandLandReform’inAnnual Survey of South African Law page409–13.10. �003(1)SA113(SCA).11. �004(1)SA50�(O).1�. Opcitnote7atpage654.13. Op cit note 8.Opcitnote8.14. Cape Killarney Property Investments (Pty) Ltd v Mahamba and Others�000(�) SA 67 (C) paragraph 13 (confirmed on appeal in Cape Killarney Investments (Pty) Ltd v Mahamba�001(4)SA1���(SCA)paragraph17).15. Cape Killarneyparagraph11.16. Unlawful Occupiers, School Site v City of Johannesburg�005(4)SA1999(SCA).17. [�00�]1AllSA115(C).18. Port Elizabeth Municipality v Peoples Dialogues on Land and Shelter & Others�000(�) SA1074(SE).19. �000(�)SA1074(SE).�0. �005(1)SA�17(CC).�1. Op cit note 7 at page 660.Opcitnote7atpage660.��. �001(1)SA46(CC).�3. Roux,T(�00�)‘UnderstandingGrootboom–AResponsetoCassR.Sunstein’1� Constitutional Forumpage111–��.�4. 1931TPD476.

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�5. 1974(3)SA13(A).�6. �000(1)SA589(C).�7. VanderWalt,AJ(�00�)‘ExclusivityofOwnership,SecurityofTenureandEviction Orders:ACriticalEvaluationofRecentCaseLaw’SAJHR37�atpage394–6.�8. �000(4)SA468(W).�9. Op cit note �8 at page 397 – 8. 30. �00� (4) SA 1 (SCA).Opcitnote�8atpage397–8. 30. �00� (4) SA 1 (SCA).30. �00�(4)SA1(SCA).31. Op cit note �8 at page 403.Opcitnote�8atpage403.3�. Ibid.bid.33. �007(6)SA417(SCA).34. �005(1)SA�17(CC).35. Wilson,S.(�006)‘JudicialEnforcementoftheRighttoProtectionfromArbitrary Eviction:LessonsfromMandelaville’page535SAJHRatpage536.36. Rightsizing is the official programme to assist people who have defaulted on theirRightsizing is the official programme to assist people who have defaulted on their housingloanstorelocatetoalternativeaffordablehouses.Governmentpayssubsidy “relocationassistance”towardsthenewhouse.37. SectorEducationandTrainingAuthoritieshavebeenestablishedtoensurethatthe skill needs for every sector of the South African economy are identified and that trainingisavailabletoprovidefortheseskillneeds.ServicesSETAaimsto providecomprehensiveinformationregardingtheAuthority,itsstructureandits functions.Theinformationispresentedinaneasilyaccessiblemanner,coveringboth general areas as well as information specific to Employers, Training Providers and Learners.38. EmeraldvanZylConsulting,SubmissiontoSAHRCInquiryonEvictions, RepossessionsandHousing,October�007

5�

Notes