Moneyweb reported recently that lawyers representing consumers facing home repossession have applauded a recent case in the Gauteng High Court which aims to block any lawyers who try to side-step court procedures by selling these homes for less than their market worth.
“The February 2022 ruling by Judge Fisher slapped down the practice of banks' lawyers approaching judges in chambers in an attempt to circumvent the reserve (floor) price requirement.”
Rule 46A (and in particular Sub-rule 9 (d) and (e) thereof) imposes an obligation on the sheriff that; should the reserve price not have been met in a sale of execution, a report must be filed with the Court for the Judge to determine how the sale should proceed or whether the highest bidder's offer should be accepted. It seemed, however, to fall short of curing the ‘evil' it sought to stop – and merely imposed an additional mechanical step for a creditor to take before selling the property without a reserve price.
It may argued that the rule is open to interpretation in that is easily foreseeable that this process may be misused resulting in perceived injustices against property owners. The process of approaching a Judge in chambers might be done without knowledge to the property owner – with the result that a decision by a Judge cannot take all the relevant factors into consideration, especially that of the property owner.
The judgment is a welcome and necessary development taking into consideration Rule 46A was introduced with the intention to protect property owners despite being indebted by imposing judicial oversight in this process. The Judgment further gives clarity in respect of the process that needs to be followed and the requirements that needs to be met by creditors before approaching a Court.
The judgment will introduce an additional opportunity to property owners to have their say before their property is sold without a reserve price and thereby ensure that their assets keep their real value, even in a sale of execution.
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.
