The Cape High Court has ruled that banks cannot take away homes of customers who default on their home loans, unless the customers have been advised of their constitutional rights of access to housing. This court was hearing nine cases that Standard Bank lodged against its customers who have not kept up payments on their home loans. The court said that customers who have defaulted on their mortgage bonds have a right to come to court with compelling evidence why the house should not be repossessed.
Nicky Lala-Mohan, a spokesperson of the Banking Council of South Africa, said banks must now improve the bond documentation when issuing bonds to customers. Constitutional rights must be brought to the attention of the bond holders. He also said it was important for mortgage defaulters to have their say in court.