Press Statement Issued by the Ombudsman for Banking Services
Bond registration delay

The complainant bought a property situated in Queenstown from the bank in August 2003 for R100 000-00. He took occupation of the property and paid occupational interest of R1 900-00 up to the date of transfer, 23 November 2005. The complainant wanted the property to be registered in his name and wanted the bank to refund some of the occupational interest he paid, as the process took too long. The bank indicated that the reason the transfer took so long was that the complainant failed to pay the costs of its attorneys and was thus not willing to compensate the complainant. A time line on the transfer process confirmed a comedy of errors with various parties causing delays at different times, either separately or concurrently. It was however established that 27 months was an unreasonably long period for a transfer. Even with delays, six months would have been more reasonable. The bank had some power over the attorneys and had a responsibility to monitor the process. In our final recommendation it was concluded that an appropriate compensation for the complainant would be the payment of a sum to represent the capital portion of his bond not paid off as a result of the delays plus an amount to compensate him for the bank’s delay in providing information to this office. An amount of R10 000-00 was recommended.

Building problems

The complainants obtained a home loan from the bank to build a property in Muizenburg, Cape Town. After completion of the property the developer demanded an amount of R13 425-00 from the complainants before he would allow them to take occupation. The complainants referred the matter to the bank for assistance. The complainants expected the bank to deal directly with the developer regarding issues of payment. There were also allegations of delays, however, the cause and nature thereof were not clear. The complainants were furthermore not satisfied with the building quality of the home. The bank advised that it did not appoint the developer as suggested by the complainant and that the amount claimed by the developer resulted from the complainants not paying interim interest on the bond account. The Building Loan Agreement clearly stated that the customer is responsible for paying the shortfall to the developer and thus the bank cannot be prescriptive to the developer in respect of allowing occupation. The property was 99% complete and a retention amount of R1 000-00 would only be paid out once it received a letter of satisfaction signed by the complainants. The quality of the workmanship should be addressed through the NHBRC. Any inspections done by the bank in respect of the property are solely for the bank’s purposes and that the bank did not warrant building quality. We concluded that it was up to the complainants to deal directly with the developer. There was no evidence of maladministration by the bank.