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Ruling undermines billions in home loans

In the case Body Corporate of Geovy Villa vs the Sheriff & Another, a sectional title unit was sold in execution for R32 000. The Pretoria Central Magistrates' court ruled that FirstRand, which had provided a bond worth R108 000, was not the preferential creditor. The judgment not only favoured the body corporate, which was owed levies, but went further and said the body corporate was not obliged to inform the bank of its intention to sell in execution.

FirstRand is taking the matter on appeal and the Banking Council of SA is considering footing the bill. "This is an industry issue, so the action could be funded by our members," says Banking Council GM Nicky Lala-Mohan.

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