IRR seeks answers on expropriation implications for home loans

31 March 2021

The Institute of Race Relations today delivered a letter to Ms Patricia De Lille, Minister of Public Works and Infrastructure, requesting clarity on the government’s position on the responsibilities expropriated property owners will have towards servicing their mortgage bonds.

If a bonded property is expropriated, does the government believe the expropriated owner must remain liable for servicing the remainder of the loan, or does it believe this loss must be carried by the financial institution?

This is a matter of intense concern for many ordinary South Africans, and a danger to their futures. It is a potential source of enormous #CitizenAbuse.

Mortgage loans amount to some R1.6 trillion in South Africa. They are also a key means by which South African households acquire homes. For most of these, it is the single biggest financial commitment they will ever make.

With expropriation without compensation having become a central policy plank, and all indications being that the Expropriation Bill will be passed into law, practical matters such as this must be addressed forthrightly.

The IRR aims to ensure that the government spells out its intentions in this regard.

Issued by Gabriel Crouse, IRR writer and analyst, 31 March 2021