‘Unclear’ expropriation laws could put South African banks at huge risk

[BusinessTech]

‘Unclear’ expropriation laws could put South African banks at huge risk

The Banking Association South Africa has called for clear policy surrounding expropriation without compensation.

 

[Gameface777]

Well what did they expect will happen!

 

[konfab]

“Care must be taken to ensure that any amendment to the Constitution does not weaken or reduce property rights in South Africa,” it said.

Why would they do that? Why would the ANC and EFF, both highly statist and power hungry parties, limit themselves at this opportunity of a power grab?
I am fully expecting that the amendment will make sure that the constitution allows for expropriation of all assets without compensation. Including land, bank accounts, IP, etc.

 

[killerbyte]

Why would they do that? Why would the ANC and EFF, both highly statist and power hungry parties, limit themselves at this opportunity of a power grab?
I am fully expecting that the amendment will make sure that the constitution allows for expropriation of all assets without compensation. Including land, bank accounts, IP, etc.

A Communist by any other name...

 

[MrGray]

It is unclear to me why the local banking sector is not more vocal. Surely they have quite a lot of financial leverage - isn't a huge portion of government debt from domestic borrowing? Or are they scared that if they push too hard they'll force government into a corner where it will be forced to do something drastic?

 

[TheMightyQuinn]

force government into a corner where it will be forced to do something drastic?

More drastic than appropriation without compensation?

Not that it's going to happen, but if my property gets appropriated without compensation, I'll stop paying my bond.

So where will that leave the bank?

 

[The_Librarian]

More drastic than appropriation without compensation?

Not that it's going to happen, but if my property gets appropriated without compensation, I'll stop paying my bond.

So where will that leave the bank?

IIRC the banks said if that happens, you will still be obliged to pay your bond - but they conveniently forgot to mention that they still "own" your property, and it will only be 100% yours once you paid the bond off 100%.

I may be wrong about this though...

 

[Trompie67]

More drastic than appropriation without compensation?

Not that it's going to happen, but if my property gets appropriated without compensation, I'll stop paying my bond.

So where will that leave the bank?

It will leave the bank the option to sequestrate you.

 

[TheMightyQuinn]

It will leave the bank the option to sequestrate you.

You mean take away my property...again?

 

[TheMightyQuinn]

IIRC the banks said if that happens, you will still be obliged to pay your bond - but they conveniently forgot to mention that they still "own" your property, and it will only be 100% yours once you paid the bond off 100%.

I may be wrong about this though...

Normally if one stops paying your bond, the bank sells your house on the open market.

If my house was given to someone else to live in, they are more than welcome to do so then....I'll be away camping.

 

[Visser]

No matter how the Constitution is changed or worded. Any change to expropriation without compensation will immediately weaken the property market. In fact, I suspect that the property market will collapse. Who would want to take a million Rand bond knowing that the land under your property could be taken any given day, without expropriation?

Perhaps single people will still take this risk, but there is no way any investor would touch any property when he/she is not guaranteed of ownership.

 

[Visser]

IIRC the banks said if that happens, you will still be obliged to pay your bond - but they conveniently forgot to mention that they still "own" your property, and it will only be 100% yours once you paid the bond off 100%.

I may be wrong about this though...

The current problems banks are facing is that your bond agreement has a specific clause, which includes the land under the property. This is also part of the sales agreement. EWC will render all these agreements void if you as bondholder no longer owns the land under the property. Banks have made exclusions for expropriation with compensation, but has nothing about without compensation.

There is absolutely no way that banks can force you to finish these agreements as they would become void and of no effect the day the government expropriates your land without compensation.

Banks may however now make changes to their bond agreements which may hold you responsible to pay off the bond in the event the property is expropriated without compensation. Then you will no longer own the land and still be liable to settle the full bond. So, this is something you need to look out for if you are still interested in buying a property.

 

[Visser]

An amendment that leaves all property or specific classes of property – homes, assets, intellectual property, productive agricultural property, among others...

Thank god my dedicated servers are based in the US & business based in Panama. There is absolutely no way these feckers will ever touch my money or assets.

 

[MrGray]

More drastic than appropriation without compensation?

Not that it's going to happen, but if my property gets appropriated without compensation, I'll stop paying my bond.

So where will that leave the bank?

No, I'm referring to the public finance level. That possibly the reason why banks aren't flexing their financial leverage (i.e. threaten to call in their markers on all public loans as well as boycott the bond/treasury markets) is because they fear that this might precipitate nationalization of the financial sector. I was just speculating on why, despite having significant financial leverage over government, they don't seem to be using it to put a stop to this madness.