Picture: Reuters
Durban - Property owners would still be expected to continue servicing their bonds even if the property gets appropriated by the state as part of the mooted plan to expropriate land without compensation.

This is according to an e-mail from Nedbank which caused a stir this week as it started doing the rounds on social media.

In the e-mail, the bank’s client services resolution manager advises a customer that “the home loan agreement is subject to contractual agreement and bond payments remain due and payable until such time that the bond is paid in full, irrespective of any form of land appropriation with or without compensation”.

Nedbank did not dispute the legitimacy of the e-mail but when customers took to social media to seek clarity, the bank called for calm and patience as the process of amending Section 25 unfolds.

The bank noted that the proposed changes to the Constitution still needed to be debated fully and would have to pass constitutional and legal muster.

“We believe that it would be wise to wait for this process to be finalised rather than pre-empt this without detail. We urge our clients to be patient as this process unfolds. Until there’s further clarity on this process, it is business as usual at Nedbank.”

Economist Dawie Roodt said property owners had every right to panic. “The reality is that if you borrow money from the bank and use your property as collateral, you are liable to service your bond even after the state has stolen your property,” he said.

“This has nothing to do with fairness - it is simply the law of contract. It is the same thing like when that property burns down. You still have to pay for it.”

Roodt warned that the amendment of the Constitution to allow for land expropriation without compensation would send the wrong message to investors worldwide.

“This is not only about land but it is about property rights. The implications are simply that if we are a capital-scarce country no one will invest here if they know we are stealing people’s property,” he said.

Roodt said the role of the state was to protect individuals and their property.

“So when the state starts stealing property, then it becomes illegitimate,” he said.

EFF deputy secretary-general Hlengiwe Mkhaliphi said the banks were jumping the gun by making the announcement.

“It is too early for them because we are now dealing with amendment of Section 25; we have not even dealt with the model that will be used. The banks just want to scare people because they think they will now be afraid of land expropriation without compensation, but they wont succeed,” she said.

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The Mercury