Minister of Public Works and Infrastructure Patricia de Lille has declined an invitation to join a livestream discussion this week hosted by the Institute of Race Relations (IRR) to clarify who will be liable for outstanding mortgage bonds on expropriated properties.
De Lille is the minister responsible for the Expropriation Bill, which is currently going through the parliamentary process.
The Banking Association of South Africa (BASA) also turned down the IRR’s invitation to participate in the same discussion. The livestream event will, however, go ahead, with IRR analysts discussing the implications of the Expropriation Bill and the reluctance of De Lille and BASA to clarify questions about outstanding loans on expropriated property.
In a statement, the IRR says De Lille’s office ‘has indicated that she has no comment to make since the process is now with parliament’.
‘Given the stakes involved, and the potential for abuse, the IRR finds this response decidedly inadequate.’
The IRR points out that the Expropriation Bill ‘provides for mortgages to be terminated in the event of expropriation, but this will not deal with the matter of outstanding debt. It further provides that any compensation might be divided between the owner and the financial institution, in a ratio to which they agree or a court determines.
‘But it is unclear what would happen if the amount owed on a bond exceeded the amount of compensation offered.’
The IRR says that ‘(since) the purchase of a home is the largest investment that most households will make, its loss would deal a mortal blow to financial planning. Being additionally responsible to service a loan after having lost the asset would be financially crippling for a lifetime’.
‘The government owes it to its citizens to explain what it envisages in such circumstances.’