Throwing the little guy under the EWC bus – Frans Cronjé

[The_Right_Honourable_Brit]

Last week, mortgage lending firm, SA Home Loans, took to social media to state that in the event of a client’s property being expropriated, the client would remain liable to settle the outstanding mortgage balance. Our enquiries suggest that firms across the financial services sector are taking a similar line. This underscores the deeply troubling moral, legal, and financial ramifications of the government’s expropriation without compensation (EWC) proposals.

This is, verbatim, what SA Home Loans had to say on Twitter:

‘In the event of expropriation, the bond payments would still remain owing to the mortgage lender. However, we understand that the rights of all parties will be considered in any expropriation processes and have no reason to believe that residential properties will be affected.’

Break that statement down into its component parts and consider them one at a time.

Whether bondholders could or should refund lenders in the event of an expropriation is becoming an area of contestation. The current draft of the Expropriation Bill of 2019 – which is likely to be enacted once the government has its EWC constitutional amendment in the bag – says that the mortgage bond will automatically be terminated on the date of expropriation, when ownership passes to the state. This means that the lender (a bank, for instance) can no longer foreclose on the property now that it is owned by the government.

However, the loan secured by the mortgage does not come to an end. Instead, the usual rule is that the expropriated owner must still pay the loan off to the bank. This, however, may be difficult for the owner to do where compensation is minimal and, in particular, where EWC applies.

If some compensation is payable, the Expropriation Bill directs that this should be apportioned between the borrower and his or her bank, according to the agreement reached between them. (If no agreement has been reached, the compensation will be paid to the Master of the High Court until such time as the dispute has been resolved.)

A similar situation applies under the current Expropriation Act of 1975, which also provides that the mortgage bond comes to an end on the date of expropriation. The critical difference, however, is that the compensation payable under the Act is market value, plus a further solatium. This amount will generally exceed the outstanding loan, making it relatively easy for the expropriated owner to pay what he or she still owes.

However, if EWC applies – or if the compensation paid is far below the amount of the outstanding loan – then many difficult issues arise.

Read more: https://www.biznews.com/thought-lea...=Social&utm_source=Twitter#Echobox=1580901231

 

[Ninja'd]

It's not like they can repo the house if I default.

 

[Fulcrum29]

Aren't some, actually most, agricultural land also residential properties?

They missed that EWC will also be applied at closing the spatial gaps in urban regions. This have been said. EWC can be applied to any land (and pending on how it will be instituted, include any and all property).

No reason to believe... Can they be any less evasive on the topic?

 

[Mista_Mobsta]

Just going to leave this here:

https://pulitzercenter.shorthandstories.com/conservation-capture--copy-news24/

People don't care about land - they care about the proceeds generated on/from their land! Besides, if the Mala-Mala incident is anything to go by, corruption surrounding expropriated land will be rampant!

 

[Moto Guzzi]

Read more: https://www.biznews.com/thought-lea...=Social&utm_source=Twitter#Echobox=1580901231

Everybody cry "we want private sector", but look how quickly the private sector can turn their back on you in a wink.

In SA case both Gov & Private sector needs a good old hiding for some sense and dissipline.
The 1st thing that skyrocketed property prises was credit for homes, the prises risen in the promise of quick money.

 

[DreamKing]

Everybody cry "we want private sector", but look how quickly the private sector can turn their back on you in a wink.

So what do you want from them? Hand you money for free? You are just an interesting guy.

 

[SoldierMan]

Utterly ridiculous.

When this does happen, the farmer who's land was EWC must go to court. I'm sure any right-thinking judge will see that the bank's position is untenable and just plain wrong.

You could be taking away that farmers sole means of income and you still expect him to pay off a loan for which the land has been stolen by the government. Frikken idiots.

 

[thestaggy]

Expropriation is being held up by politicians, the government, policymakers and activists as a ‘social good’ and as a key means of bringing about redress, prosperity, and social cohesion, among other things. President Cyril Ramaphosa once suggested that EWC would bring about a Garden of Eden. Some business leaders have also gone on the record to say that they support the principle of expropriation.

''Lets build society by forcibly driving a specific group off of their legally-owned land''. Sound familiar? Yeah, thought so. Nothing cohesive about it.

 

[MrGray]

"we have no reason to believe that residential properties will be affected"

But we don't care if it happens to farmers?

And "no reason to believe" is not exactly reassuring.

 

[Tokolotshe]

Utterly ridiculous.

When this does happen, the farmer who's land was EWC must go to court. I'm sure any right-thinking judge will see that the bank's position is untenable and just plain wrong.

You could be taking away that farmers sole means of income and you still expect him to pay off a loan for which the land has been stolen by the government. Frikken idiots.

Ten years agao I'd agree with you. But looking at some of the later judgements, I'm not so sure. Also consider if you've lost your livelihood, you'd probably not be in a position to afford advocates etc for the high court, SCA , constitutional court.

 

[ToxicBunny]

They can actually legally say whatever they want...

The bank can get fscked if they think I'd pay a single cent towards a bond on a property that has been expropriated.

 

[Cube3]

The reason they are so vague about it, is because it is going to be a LOT worse than they let on.

 

[surface]

''Lets build society by forcibly driving a specific group off of their legally-owned land''. Sound familiar? Yeah, thought so. Nothing cohesive about it.

Where did this happen? What was government doing that time? Were you there? Did you take video? How do you know it really happened?

 

[Tman*]

They can put in the all the clauses they want.

Unless people go to jail for bad debt (like in some middle eastern countries) it wont make any difference. Even then the bulk of folk will just abandon their homes and flee, just like those pics with the abandoned supercars in the middle east.

 

[3WA]

Where did this happen? What was government doing that time? Were you there? Did you take video? How do you know it really happened?

^Found the apartheid denialist!

 

[Sinbad]

Where did this happen? What was government doing that time? Were you there? Did you take video? How do you know it really happened?

The government of the day did it.
District 6 comes to mind.

 

[surface]

The government of the day did it.
District 6 comes to mind.

Ah but then all good then. Government is for the people, by the people and all that.

 

[dualmeister]

The bank can get fscked if they think I'd pay a single cent towards a bond on a property that has been expropriated.

What they gonna do? Repossess your property

 

[surface]

I own thousands of acres of land in all the provinces. Should I be worried?

 

[dualmeister]

I own thousands of acres of land in all the provinces. Should I be worried?

Do they have minerals on them?