Monthly Archives: August 2018

Protection of primary residence during the foreclosure process

The main purpose of the insertion of Rule 46A in the Rules of the High Court is to try and obtain a constitutional balance between the rights of execution creditors and judgment debtors, especially as access to housing is a fundamental human right entrenched in the South African constitution.

The insertion effective from 22 December 2017 has had the implication that the foreclosure process for execution creditors (credit providers) has become more intricate. This rule is applicable in instances where an execution creditor applies to Court for an order to sell the property at a sale in execution due to the judgment debtor’s mortgage bond account being in arrears.

The Court will assess all information in order to make an informed decision as to whether execution against the property is warranted, which includes the following :

  • Whether the property is the primary residence of the judgment debtor.
  • Whether the Application was served personally on the judgment debtor, unless the Court orders service in any other manner.
  • The execution creditor needs to provide the Court with the market value of the property, the local authority valuation, all amounts owing on the mortgage bonds registered over the property, all amounts owing to the local authority and to a body corporate or home owners association (if applicable).

A judgment debtor or any interested party on which the Application has to be served i.e. the municipality, body corporate, home owners association or tenant, is allowed to oppose the Application and to address the Court on relevant information that needs to be considered before a Court grants the order applied for by the execution creditor.

The Court has a discretion to order that the property be sold with a reserve price or without a reserve price.

A Court will not grant an order that the execution creditor may sell the property at a sale in execution if it is of the opinion that the debtor can satisfy the debt in an alternative manner.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.  Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)