South Africa: The Builder's Lien : Not Necessarily An Unassailable Right - Beware Of The Bona Fide Dispossessor

Last Updated: 3 May 2012
Most Read Contributor in South Africa, September 2018

Article by Rob Scott and Doron Block

Builder's Depot CC v Testa 2011 (4) SA 486 (GSJ)

This is a recent decision of the South Gauteng High Court, Johannesburg.  The case is summarised in this article as the facts underlying the decision demonstrate how a Contractor, in exercising a builder's lien over property as security for outstanding payment, may lose possession to a third party who acquires possession in good faith (the bona fide possessor), thereby foregoing the right to retain the lien.  The court applied established law.

the case:

The Contractor was hired by the Employer to carry out construction works on the Employer's property.  A payment dispute arose between the Contractor and the Employer.  The Contractor duly exercised a builder's lien over the Employer's property (as security for payment for work done) by retaining possession of the property, locking the property and retaining the keys (in its sole possession and to the exclusion of the Employer).

The Contractor thereafter obtained a judgment against the Employer for arrear payment and instructed the sheriff to attach and  sell the property in order to meet the judgment debt.  The sheriff attached the Employer's property in February 2010.  The sale in execution of the judgment proceeded slowly.  On 7 October 2010 the Contractor's attorney wrote to the sheriff instructing him to proceed with the sale of the property in execution of the judgment debt.

Over the same period of time, and unbeknown to the Contractor, a bank (to which the property was bonded) also obtained a judgment against the Employer.  The bank instructed the same sheriff to attach and sell the Employer's property in order to meet the judgment debt.  The sheriff then attached the property for the second time (during August 2010), on this occasion on behalf of the bank.

In response to the letter from the Contractor's attorney of 7 October 2010, the sheriff notified the Contractor's attorney that its matter "will participate in the sale in execution which will be held on 28 October 2010...", the sheriff's intention being to sell the property on behalf of and for the benefit of both parties.

The sheriff sold the property in execution on 28 October 2010 to the Purchaser.  The Purchaser immediately changed the locks and took possession of the property.

The Contractor claimed that it only found out about the sale after the sale had taken place (maintaining that its attorney had not received the sheriff's notification of the sale), and after the Purchaser had already taken possession of the property.  The Contractor claimed that its peaceful and undisturbed possession of the property was lost and it accordingly applied to court for an order that it had been unlawfully dispossessed of the property (by the Purchaser) and for an order restoring possession of the property to it.

The court found that the Purchaser's possession derived from the sheriff's actions following the sale in execution; was obtained in good faith and there was no reason for the Purchaser to believe that he was acting unlawfully.  To quote from the judgment:

"When the [Purchaser] took possession, there was, other than for the need to change the locks, no evidence that anybody else was in possession of the property.  Specifically, the [Contractor] did not erect any signs to advertise his possession, and he also did not employ a guard to protect his possession.  There was no reason for the [Purchaser] to think he was doing anything unlawful or against the will of the [Contractor] when he changed the locks and the [Contractor] did not allege that the [Purchaser] was aware of its possession of the property.  The [Purchaser's] intention was to obtain possession of the property pursuant to the purchase of the property and payment of the fees and terms and conditions of sale."

After an analysis of the legal authorities, the court concluded that a restoration order cannot be granted in favour of a party "who has parted with possession to a bona fide possessor."  Accordingly, the Contractor's application had to fail, as the Purchaser had obtained possession of the property in good faith and had also done nothing unlawful, and because the Contractor had lost possession "by virtue of the sheriff's actions in selling the property in question in execution, accepting payment from the [Purchaser] and by authorising the [Purchaser] to take possession by changing the locks".

There was also no evidence to show that the sheriff had acted in bad faith or had done anything unlawful.  In terms of the relevant rule of court, the property had to be attached by notice, which it was.  That action did not dispossess the Contractor of the property.  In terms of the conditions of sale in execution, the sheriff had to give possession of the property to the Purchaser immediately after the initial deposit was paid, which is exactly what was done.

comment :

  • A Contractor has a common law right to exercise a builder's lien over property as security for payment for work carried out on the property, until paid.  He may exercise this right provided that he has not waived the right. 
  • How is a Contractor to exercise his lien? 
    • He must exercise possession over the property.
    • He exercises possession by clearly exhibiting his intention of remaining in possession and by exercising the rights of possession (these elements may amount to one and the same).  It is important to note that he is not required to be physically present on the property.
    • He must necessarily exercise his possession by way of an overt act, thereby demonstrating to any would-be possessor that he retains possession.  Such overt act might encompass retaining a physical presence on the property, informing any would-be possessor (ordinarily the owner but not necessarily limited to the owner) that he is exercising a lien over the property;  fencing and/or locking the property;  erecting a sign proclaiming that he exercises a lien over the property;  employing a guard to protect his possession or a combination of these measures.  He must take such action as would be sufficient to be able to negate a contention by a would-be possessor that he has taken possession of the property in good faith, (and has therefore acted lawfully).
  • He may be lawfully dispossessed (and thereby forego the right to retain his lien) where he loses possession to another person acting in good faith (the bona fide possessor), as this decision demonstrates :
    • It may not be sufficient to simply fence or lock the property in question, in exercising a builder's lien.

    • A prudent possessor, ought also to erect a sign proclaiming his possession and/or appoint a guard to protect his possession.
  • The decision in this matter was based on the important principle that where possession is obtained by a party in good faith, a restoration order cannot be granted in favour of the person who has lost possession.  Therefore, where the dispossessor obtains possession in good faith, he does not act unlawfully.  The question of lawfulness, in this context relates to the manner in which dispossession has taken place, and not to the title or right of the person having been dispossessed.
  • Where a possessor exercising a builder's lien is unlawfully dispossessed, because for instance he is physically removed from the property or is shut out from the property, or because the dispossessor is not in good faith, possession may be restored by court order.  Legal action would need to be instituted promptly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions