How to stop the sale in execution scam in its tracks
The good news is that this is changing. Judges are tired of Absa and other banks trolling the courts with recreated documents, claiming the originals were destroyed in the infamous Docufile fire of 2009. How they managed to get so many thousands of judgments against customers without the original documents (which is the only way to tell whether what they are claiming is lawful or even truthful) beggars the imagination.
Judgment against a defaulting bank customer is followed by Sale in Execution – this is when the customer’s home or assets are sold at sheriffs’ auctions around the country. It is well known that these auctions are nesting grounds for organised syndicates. Homes are sold for a fraction of their market worth.
Here’s how you stop this scam in its tracks
Let’s say judgment has been granted against you, declaring your home “executable” because you defaulted on your bond. This means the home will now be sold at a sheriff’s auction.
The conditions of sale at the sheriff’s auction will typically stipulate that the purchaser is entitled to immediate occupation. However, at this point, the purchaser (often a property investor syndicate) takes the law into his own hands by evicting you before transfer of the property has taken place. They will often do this by shutting off the electricity and water.
This is when the scam enters its next phase: the purchaser will rent the property, before transfer has taken place, so earning income in the meanwhile.
At this point we need to understand the difference between personal and real rights. Streetdirectory.com defines it this way:
“An easier way to distinguish between real rights and personal rights is to keep in mind that real rights establish a legal relationship between a thing/property and a person, whereas personal rights establish a legal relationship between two persons…”
From a legal standpoint, the purchaser has only purchased personal rights on the sale in execution enforceable only between himself and the sheriff. In other words, the purchaser does not as yet have any real rights to the property. This only happens when transfer takes place at the Deeds office.
Should you find yourself facing eviction, you should defend the matter citing Jaftha v Schoeman and others; Van Rooyen v Stoltz and Others  3 All SA 690 [C] wherein it is stated that: “until an immovable property that has been sold in execution has been transferred into the name of the purchaser, the judgment debtor’s ownership therein remains undisturbed as does his or her right, qua owner, to the use thereof… a sheriff who has contractually bound himself to provide vacua possession, will have to institute eviction proceedings. In such proceedings the substantive and procedural requirements of the PIE (Prevention of Illegal Eviction from and Unlawful Occupation of Land Act) Act will have to be complied with.”
Here's another quote from the Jaftha judgment: "Before turning to a more detailed consideration of section 26 (of the Constitution), I emphasise that the underlying problem raised by the facts of this case is not greed, wickedness or carelessness, but poverty. What is really a welfare problem gets converted into a property one. People at the lower end of the market are quadruply vulnerable: they lack income and savings to pay for the necessities of life; they have poor prospects of raising loans, since their only asset is a state-subsidised house; the consequences of inability to pay, under the law as it stands, can be drastic because they live on the threshold of being cast back into the ranks of the homeless in informal settlements, with little chance of escape; and they can easily find themselves at the mercy of conscienceless persons ready to abuse the law for purely selfish gain."
Possession and Occupation
So long as you physically occupy your home, the purchaser has no right to interfere with you in any way until transfer and registration of the property in the new owner’s name has occurred – notwithstanding any condition to the contrary in any deed of sale on execution.
The case to cite in this instance is Red Stripe Trading 68 CC v Joseph 2005 JDR 0705 (W) wherein it is stated that possession of immovable property is a juristic fact. It requires actual control of the property, and does not pass by virtue of a contractual provision that the purchaser “shall be deemed to have taken occupation” or “that the purchaser shall be obliged to take possession”.
In other words, you should not surrender your home when faced with eviction – even when the sheriff arrives and shows you the Sale in Execution order issued by the court. You should stand your ground and cite the above cases. Get legal representation here if in any doubt. Your possession of the property is your legal right, until transfer has occurred at the Deeds office. And, as already mentioned, many of the scamsters buying these properties at auctions have no intention of taking transfer – they just want you out of the home so they can rent it. You should call their bluff and remain in possession of your house.
Taking the law into their own hands
The purchaser is not entitled to take the law into their own hands to enforce his rights as he perceives them before or after transfer.
Should the purchaser attempt take the law into his own hands at any time before or after transfer without recourse to a court of law, you may take any steps - with or without force - to protect your occupation of the property; involve the police by laying charges of intimidation and harassment if need be.
Granting the purchaser access to the property
After sale, access to the property for any purposes can legally be denied until permission has been granted by you.
Once registration of transfer has been effected, you, and all those persons who take occupation of the property through you, must, as far as possible at that time, vacate the property.
Should you refuse to surrender the property, the purchaser will have to seek an eviction order against you, which you are entitled to defend. On this point, there are a few interesting cases ongoing that are being defended. In one case before the Cape High Court, the defendant has joined the Cape City Council to the proceedings, arguing that he has no alternative accommodation and the City Council is obliged under the Constitution to provide him accommodation. This case could stretch out for years. In other words, even when faced with an eviction order, you can defend this matter for years and the law will support you. South Africa has a horrible history of illegal and shameful evictions going back to the apartheid years. The Constitution and the above cases are intended to provide maximum protection to occupants of their homes.
I repeat, always defend. The Sale in Execution industry in South Africa is rotten with scamsters and remember, you have legal rights every step of the way.
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