Asked by the Customer on 27-01-2015 09:59:28
Question posted in the National Credit Act Law category relating to Gauteng
Question posted in the National Credit Act Law category relating to Gauteng
Hi,
I require some assistance in respect of the following:
I was employed at Nedbank up to 20 October 2014 where after I have changed companies.
During my stay at Nedbank my wife and I successfully applied for a Nedbank home loan (more specific a building loan). As part of the benefits extended to Nedbank staff, we were afforded the opportunity to have access to a fringe benefit interest rate of Prime less 2.5%. Upon termination of employment, Nedbank informed me that the fringe benefit rate will be reverted to Prime less 1.25% because I am no longer an employee. However, the Nedbank home loan credit agreement which we signed did not stipulate any such clause whereby the interest rate of Prime less 2.5% will be returned to the Prime interest rate. The final credit agreement which my wife and I signed only stipulated that the credit agreement in respect of the interest rate was afforded to us at Prime less 2,5% and did not stipulate that it was under condition of the Nedbank Staff Housing Scheme nor under the condition of employment at Nedbank. The only reference was in the pre-agreement quote but this condition was not carried across to the final credit agreement nor any reference made to it. Also, my employment agreement does not stipulate that any of the benefits derived will fall away if I am no loner in the employ of Nedbank.
The reason for my email is that Nedbank has contacted constantly and want to change the condition in the credit agreement whereby the Prime less 2.5% was awarded, restructure the agreement and due to an omission of a clause from their side, we need to reach an amicable agreement. This was telephonically confirmed by Nedbank Home Loans Head of Home Loans Greg Salter on 03/12/2014.
According to my understanding, we have upheld all of the required conditions of the loan agreement to-date, all payments have been made on time via a debit order, etc. but unfortunately Nedbank is of the view that they have the authority to change the credit agreement although I have yet to find a clause in the final credit agreement where it is stipulated nor have they been able to point this out to me.
I trust you will be able to shed light on the matter.
Regards
Jacques
I require some assistance in respect of the following:
I was employed at Nedbank up to 20 October 2014 where after I have changed companies.
During my stay at Nedbank my wife and I successfully applied for a Nedbank home loan (more specific a building loan). As part of the benefits extended to Nedbank staff, we were afforded the opportunity to have access to a fringe benefit interest rate of Prime less 2.5%. Upon termination of employment, Nedbank informed me that the fringe benefit rate will be reverted to Prime less 1.25% because I am no longer an employee. However, the Nedbank home loan credit agreement which we signed did not stipulate any such clause whereby the interest rate of Prime less 2.5% will be returned to the Prime interest rate. The final credit agreement which my wife and I signed only stipulated that the credit agreement in respect of the interest rate was afforded to us at Prime less 2,5% and did not stipulate that it was under condition of the Nedbank Staff Housing Scheme nor under the condition of employment at Nedbank. The only reference was in the pre-agreement quote but this condition was not carried across to the final credit agreement nor any reference made to it. Also, my employment agreement does not stipulate that any of the benefits derived will fall away if I am no loner in the employ of Nedbank.
The reason for my email is that Nedbank has contacted constantly and want to change the condition in the credit agreement whereby the Prime less 2.5% was awarded, restructure the agreement and due to an omission of a clause from their side, we need to reach an amicable agreement. This was telephonically confirmed by Nedbank Home Loans Head of Home Loans Greg Salter on 03/12/2014.
According to my understanding, we have upheld all of the required conditions of the loan agreement to-date, all payments have been made on time via a debit order, etc. but unfortunately Nedbank is of the view that they have the authority to change the credit agreement although I have yet to find a clause in the final credit agreement where it is stipulated nor have they been able to point this out to me.
I trust you will be able to shed light on the matter.
Regards
Jacques
Message from the Attorney
Posted by Att. Patrick on 29-01-2015 19:10:36
Hi there and thank you for your question,
Typically, and I mean in 99% of all cases, an agreement that has been reduced to writing and signed by the parties IS the only agreement between those parties, especially when that agreement contains a "non-variation" clause. i.e. a clause that says that ALL terms need to be in writing and signed by the parties.
If you have a signed agreement, and the bank is now asking you to re-sign a NEW agreement with the higher interest rate reflected, it is most probably because they know that they made a mistake and forgot to add in the correct clause, etc. They know that it would be easier, cheaper and quicker for them just to make you sign a new agreement.
If you refuse, they could just adjust it by themselves, unilaterally, and then let you fight them to have it returned to what it currently is. You could fight them in court, or you could report their conduct to the credit tribunal.
OR, they could take you to court to have the agreement amended to reflect what they say the "correct" clause should be.
What you should do is write back to them and place your version of events on record. Explain that:
- the Nedbank home loan credit agreement which we signed did not stipulate any such clause whereby the interest rate of Prime less 2.5% will be returned to the Prime interest rate.
- The final credit agreement which my wife and I signed only stipulated that the credit agreement in respect of the interest rate was afforded to us at Prime less 2,5% and did not stipulate that it was under condition of the Nedbank Staff Housing Scheme nor under the condition of employment at Nedbank.
- my employment agreement does not stipulate that any of the benefits derived will fall away if I am no loner in the employ of Nedbank.
You should explain that as far as you are concerned, you have entered into a valid and binding agreement with the bank and if they intend unilaterally amending the terms of the agreement you reserve your legal rights to challenge their decision. Explain that we have upheld all of the required conditions of the loan agreement to-date, all payments have been made on time via a debit order, etc
It is important to get this documented by you in writing.
If the bank does change it, the basis that they would argue that they can is due to the fact that The only reference was in the pre-agreement quote but this condition was not carried across to the final credit agreement nor any reference made to it.
They would argue that there was a common mistake (i.e. both parties intended that the clause be in the final agreement, and it was in the pre-agreement quotation, and by mistake it was left out of the final document) and therefore they are entitled to apply to court to have it amended. They would probably win, unless you could prove that there was no common mistake. i.e. you agreed that it would be left out in the final version... which I don't think is the case.
If you wanted to challenge the bank, I would take a hard line approach as I suggested 3 or 4 paragraphs above.
My advice however might be to settle the matter on Prime less 1.75% (half the difference) on the agreement that the lesser rate only kicks in in 6 months time?
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
Typically, and I mean in 99% of all cases, an agreement that has been reduced to writing and signed by the parties IS the only agreement between those parties, especially when that agreement contains a "non-variation" clause. i.e. a clause that says that ALL terms need to be in writing and signed by the parties.
If you have a signed agreement, and the bank is now asking you to re-sign a NEW agreement with the higher interest rate reflected, it is most probably because they know that they made a mistake and forgot to add in the correct clause, etc. They know that it would be easier, cheaper and quicker for them just to make you sign a new agreement.
If you refuse, they could just adjust it by themselves, unilaterally, and then let you fight them to have it returned to what it currently is. You could fight them in court, or you could report their conduct to the credit tribunal.
OR, they could take you to court to have the agreement amended to reflect what they say the "correct" clause should be.
What you should do is write back to them and place your version of events on record. Explain that:
- the Nedbank home loan credit agreement which we signed did not stipulate any such clause whereby the interest rate of Prime less 2.5% will be returned to the Prime interest rate.
- The final credit agreement which my wife and I signed only stipulated that the credit agreement in respect of the interest rate was afforded to us at Prime less 2,5% and did not stipulate that it was under condition of the Nedbank Staff Housing Scheme nor under the condition of employment at Nedbank.
- my employment agreement does not stipulate that any of the benefits derived will fall away if I am no loner in the employ of Nedbank.
You should explain that as far as you are concerned, you have entered into a valid and binding agreement with the bank and if they intend unilaterally amending the terms of the agreement you reserve your legal rights to challenge their decision. Explain that we have upheld all of the required conditions of the loan agreement to-date, all payments have been made on time via a debit order, etc
It is important to get this documented by you in writing.
If the bank does change it, the basis that they would argue that they can is due to the fact that The only reference was in the pre-agreement quote but this condition was not carried across to the final credit agreement nor any reference made to it.
They would argue that there was a common mistake (i.e. both parties intended that the clause be in the final agreement, and it was in the pre-agreement quotation, and by mistake it was left out of the final document) and therefore they are entitled to apply to court to have it amended. They would probably win, unless you could prove that there was no common mistake. i.e. you agreed that it would be left out in the final version... which I don't think is the case.
If you wanted to challenge the bank, I would take a hard line approach as I suggested 3 or 4 paragraphs above.
My advice however might be to settle the matter on Prime less 1.75% (half the difference) on the agreement that the lesser rate only kicks in in 6 months time?
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
Answer Accepted
This answer was accepted on 30-01-2015 09:59:58
If you would like to view the entire answer, you will need to either login or register a FREE account.