New High Court rules force fair valuation in property repossessions

The High Court has introduced stricter requirements and clearer definitions as part of amended rules to tighten procedures around the valuation of immovable property sold in execution.

Judge president of the High Court, Petrus Damaseb, confirmed in a notice issued in the Government Gazette of 31 March that the amendments made under the High Court Act of 1990 take effect from 9 March.

The changes redefine key terms, including the introduction of “sworn valuation”, described as a valuation made under oath or affirmation by a valuer, and broaden the definition of a “valuer” to include any competent person, including estate agents, with the necessary training or demonstrable experience.

A major amendment to Rule 109 requires that, where a primary residence is sold in execution, the deputy sheriff must determine the market value at least 35 days before the sale by obtaining two separate sworn valuations.

The rules further allow an execution debtor, at their own expense, to challenge a preliminary valuation by obtaining an independent sworn valuation and submitting it to the execution creditor or their legal practitioner, as well as to the deputy sheriff, no less than 25 days before the sale.

The rules have also been revised to formalise documentation requirements, including the recording of two market-related sworn valuations and procedures for independent valuations obtained by execution creditors.

Loan payment defaults

This move comes two years after the former justice minister Yvonne Dausab was expected to operationalise a new law protecting homeowners against bank repossessions due to loan payment defaults.

Late president Hage Geingob signed into law the Magistrates’ Courts Amendment Act of 2023 on 21 December 2023 to protect homeowners.

Dausab submitted a discussion paper to parliament requesting leniency in regulations to prevent borrowers from losing their homes in 2023.

In a social media post, lawyer Kadhila Amoomo explained that now, if someone owes a bank or another person and a judgment is granted against them, they can no longer sell their house for 'peanuts'.

“They are now required to obtain two sworn evaluations to determine the market value of your house. If you are not happy with sworn valuations, you also have the option of getting your own evaluators,” he wrote.

"Gone are the days when bank officials would collude to sell and buy your house for peanuts. This is good,” he said.

Another commenter, Nendongo Onesmus, also praised the development.

“Not sure why it took so long to get here. If you owe the bank N$1 million on your house, and it gets repossessed and sold for N$500 000 at auction, you are still liable for the remaining N$500 000."

Onesmus added that "on top of that, your credit record is damaged, and you may be blacklisted until the balance is settled. So you lose the house, your credit is ruined, and you’re still in debt.

"At least now, banks will be forced to sell properties closer to market value, which means the debt can be settled in full and the customer can walk away cleared,” Onesmus noted.

Another commentator, who chose not to be named, said while it is welcome news, the changes are still not good enough.

“Shelter is a necessity; they should find alternatives to recoup. Why do some banks write off bad debts but others continue to repossess houses? Things like cars are a luxury,” he argued.

Property repossessions

Three years ago, National Ownership Association chairperson August Maletzky led a mass protest against property repossessions by commercial banks, the Bank of Namibia (BoN) and several lawyers, and handed over a petition to parliament.

The protest was attended by just over 20 Windhoek residents, most of whom shared similar stories of property repossessions.

Maletzky made headlines in 2021 on allegations of fraud and corruption after he allegedly fraudulently sold the house of 84-year-old Samuel Dias and his wife in 2017 for N$2.5 million.

The High Court declared the sale null and void earlier that year.

It further ordered Maletzky to pay Dias' legal costs and to reregister the house in the name of the original owner.

Maletzky sold Dias' house in Windhoek West to Windhoek resident Edward Nghitumbwa in September 2017, after leasing the home for a year at a monthly payment of N$10 000.

During the protest, Maletzky, along with a handful of protestors, marched to several commercial banks along Independence Avenue, demanding the return of their property.

According to the association chairperson, thousands of Namibians have suffered the "unconstitutional loss of primary homes, land and other forms of movable and immovable assets on account of default judgments".

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