Browsing by Author "Brits, Reghard"

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    Mortgage foreclosure under the constitution : property, housing and the National Credit Act
    (Stellenbosch : Stellenbosch University, 2012-12) Brits, Reghard; Van der Walt, A. J.; Lubbe, G. F.; Stellenbosch University. Faculty of Law. Dept. of Public Law.
    ENGLISH ABSTRACT: The forced transfer of immovable property to enforce judgment debts by way of sale in execution has constitutional implications. Firstly, if the property is residential, section 26 of the Constitution (the housing clause) raises the question whether the current legal framework takes sufficient account of the imperative to respect people‟s access to adequate housing. Read with section 36 (the limitation clause), the requirement is that someone‟s home may only be violated if the result is proportionate based on all the relevant circumstances. Secondly, since the home qualifies as “property” for purposes of the section 25 (the property clause), the law that regulates this forced sale may not permit the arbitrary deprivation of property. In other words, it is necessary to also investigate whether the sale in execution of debtors‟ property satisfies the section 25(1) non-arbitrariness test. Therefore, the research problem that this dissertation addresses revolves around the implications of sections 25 and 26 of the Constitution for the “normal” sale-in-execution process. More specifically, the scope of the investigation is limited to forced transfers of residential property as a result of mortgage foreclosure. What makes this perspective interesting is that, in addition to the debtor‟s constitutional rights, the creditor also enjoys constitutional protection by virtue of the limited real right (the mortgage) that is registered over the debtor‟s home. This real security right is also “property” that is worthy of recognition under section 25. To the extent that the National Credit Act places obstacles in the way of creditors‟ right to enforce their debts, this interference may also amount to a deprivation of property, which must satisfy the requirements of the property clause. This dissertation shows that the traditional common law framework of mortgage foreclosure does not give full effect to debtors‟ sections 25 and 26 rights. Nevertheless, based on the subsidiarity principles, I argue that a development of the common law or the creation of unique constitutional defences is not called for. The reason for this submission is that the debt relief mechanisms of the National Credit Act already provide constitutionally appropriate relief for debtors who face the loss of their properties. The available mechanisms – including debt review, debt rearrangement and the right to reinstate credit agreements – are aimed at resolving the root of mortgage foreclosure, namely over-indebtedness. This approach will ensure that mortgage foreclosures have a constitutionally valid and proportionate effect on the rights of both parties to the mortgage relationship.
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    Protection for homes during mortgage enforcement : human-rights approaches in South African and English law
    (Juta Law, 2015-01) Brits, Reghard
    This article investigates the enforcement of mortgages in South Africa and England. It specifically focuses on the influence of human-rights housing principles in so far as they may require courts to conduct a proportionality enquiry whenever a legal process leads to the loss of a home. It appears that art 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms — essentially the United Kingdom’s housing clause — is conceptually similar to s 26(1) of the South African Constitution. The underlying idea is that, when a home is violated, justification must be provided as regards the proportionate relationship between the purpose of the violation and the impact of the violation on the occupier. English law already accepts that this principle applies when local authorities seek to evict unlawful occupiers, but this approach has not yet been extended to mortgage repossessions. Conversely, South African law already acknowledges that the housing clause must be applied in mortgage cases. After investigating developments in both jurisdictions, the article concludes that a proportionality test is workable in mortgage cases. Furthermore, the traditional assumption that ‘creditors must win’, although still relatively strong, is in the process of being replaced by a more contextual approach.
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    Purging mortgage default : comments on the right to reinstate credit agreements in terms of the National Credit Act
    (Juta Law Publishing, 2013-01) Brits, Reghard
    Section 129(3) and (4) of the National Credit Act provides debtors who are in default with their credit agreements with the right to reinstate such agreements by paying the actual amounts that are overdue as well as permitted default charges and enforcement costs. Particularly in the mortgage foreclosure context, this mechanism provides relief for credit consumers and it might just be the last opportunity for mortgage debtors to save their homes. Mortgagees are traditionally entitled to refuse the late payment of home loan instalments and therefore to continue with foreclosure, the result being sale in execution of the home. However, the Act has changed this state of affairs and now allows debtors to prevent and even reverse the creditor's election to foreclose by complying with the requirements for reinstatement. Therefore, the operation of acceleration clauses is now qualified by the principles of reinstatement. It is possible to reinstate the mortgage agreement after judgment has been granted, and even after the property has been declared specially executable and attached. However, from the point that the property is sold at the auction, reinstatement is no longer possible. The result of reinstatement is that the attached property is released from the execution process and returned to the debtor. The credit agreement will continue to operate as it did prior to default.
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    The statutory security right in section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 - does it survive transfer of the land?
    (Juta Law Publishing, 2014-01) Brits, Reghard
    The Supreme Court of Appeal's decision in City of Tshwane Metropolitan Municipality v Mathabathe 2013 4 SA 319 (SCA) may have some implications for the interpretation of section 118(3) of the Local Government: Municipal Systems Act 32 of 2000. This subsection provides that municipal debts constitute a "charge" upon the immovable property to which the debts relate. In other words, municipalities are afforded a type of statutory real security right that secures payment of the debt. A potential problem with the decision is that one could read it to mean that the municipality's security right is enforceable against successors in title, hence that it continues to exist even after the property has been transferred to a new owner. This prospect is controversial because it could have the effect that a later owner is held liable for the municipal debts incurred by a previous owner. Just as problematic, the municipality's charge would enjoy preference above the claims of mortgagees. This contribution discusses the case and briefly considers whether the supposed interpretation is sustainable. A suggestion is made regarding the way in which section 118(3) should be interpreted so that it makes practical sense, has fair consequences and is in line with section 25(1) of the Constitution of the Republic of South Africa, 1996. The conclusion is that the municipality's charge is not enforceable against successors in title, but that it must be enforced before or at transfer of the property.