SA Affordable Housing March - April 2020 // ISSUE: 81 | Page 36

FINANCE MATTERS
Property repossession and
the process of a sale in
execution - Part 1
By the Banking Association of South Africa
An important feature of a home loan (mortgage) agreement is that a
debtor (mortgagee) agrees that they will put up their home (property)
as security for the repayment of the loan to the bondholder (often a
bank) that granted the bond over their property. Sales in execution are
considered as an exception to the norm and are only used by banks as an
absolute last resort when all other avenues have fully been exhausted.
This is the first of a two-part article.
I
t is widely recognised and agreed that
access to adequate housing satisfies a
basic human need for secure and
comfortable accommodation. It is
espoused in Section 26 of the South
African Constitution that “Everyone has
the right to have access to adequate
housing and that the state must take
reasonable legislative and other
measures within its available resources,
to achieve the progressive realisation of
this right. No one may be evicted from
their home, or have their home
demolished without an order of the
court made after considering all the
relevant circumstances. No legislation
may permit arbitrary evictions”.
Understandably so, property
repossessions and sales in execution are
an emotive topic but it is important to
note that banks are not in the business of
acquiring assets and prefer to rather
assist defaulting mortgages to make good
on the terms of their home loan
agreement, a bank will typically consider
other alternatives before they take a
property into SIE.
This article will deal with the
repossession and the sale in execution
Understandably so, property repossessions and sales in execution are an emotive topic.
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MARCH - APRIL 2020
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