| (1) |
The manager may in its discretion, but subject to the provisions of sections 4(1) and 4(2) of the Act, exercise and enforce through and in the name of the nominee company, on behalf of the participants, any or all of the rights of the participants under any participation bond included in such scheme and, without affecting the generality of the foregoing, may:— |
| (a) |
grant any consent in any case where the consent of a mortgagee, a legal holder of a bond or a holder of a bond is required in terms of the Deeds Registries Act, 1937 (Act No. 47 of 1937); |
| (b) |
institute any legal proceedings in respect of the participation bond and any security collateral thereto, in particular to recover any amount owing, and sell the immovable property mortgaged under the participation bond and under any security collateral thereto in execution of any judgement obtained; |
| (c) |
grant to the mortgagor under the participation bond extension of time to pay the mortgage debt or interest thereon; |
| (d) |
subject to rules 4 and 5, grant re-advances to the mortgagor under the participation bond or grant any additional advance upon the security of a pari passu participation bond, at such rate of interest and upon such terms of repayment as the manager may deem fit; |
| (e) |
agree to change the rate of interest payable under the participation bond and to amend any other conditions thereof; and |
| (f) |
receive notice from or give notice to the mortgagor under the participation bond for the repayment of the whole or any portion of the debt secured under the participation bond. |
| (2) |
When an immovable property is sold in execution as contemplated in subparagraph (1)(b) and the price fetched is not sufficient to cover the amount outstanding on the participation bond plus the foreclosure costs, the following shall apply:— |
| (a) |
if the manager reasonably believes that the price fetched represents the realistic open market value of the property it: |
| (i) |
shall not prevent the property from being sold to the highest bidder; |
| (ii) |
shall deal with the amount realised after deduction of foreclosure costs in terms of Rule 12; |
| (iii) |
may pursue action against the mortgagor under the participation bond or any other party who may be held liable, for recovery of any loss suffered by the scheme; |
| (b) |
alternatively to (a) if the manager reasonably believes that the price fetched does not represent the realistic open-market value of the immovable property: |
| (i) |
the manager must buy-in the immovable property and at its cost cause it to be registered in the name of the nominee company; |
| (ii) |
the nominee company shall hold the immovable property in lieu of the participation bond as nominee for or representative of the participants; |
| (iii) |
the manager shall receive any income derived from the immovable property and shall bear all expenses, rates and taxes relating to the immovable property; |
| (iv) |
the manager shall take care that the property is adequately insured while held by the nominee company, Rule 7 finding application with the necessary changes; |
| (v) |
the immovable property shall be disposed of as soon as practically feasible, considering the interests of the participants: provided that the holding of the property beyond twelve months will require the Registrar's consent; |
| (vi) |
the proceeds of the disposal of the immovable property after deduction of |
| (aa) |
any outstanding legal costs consequent upon the foreclosure proceedings and costs of transfer of the immovable property to the nominee company; |
| (bb) |
sales commission payable in respect of the disposal in terms of sub-paragraph (v); and |
| (cc) |
any deficit arising from the holding of the property as envisaged by sub-paragraph (iii); |
shall be for the credit of the scheme;
| (vii) |
any loss arising from the buying in, holding or and disposal of the immovable property shall be dealt with in terms of Rule 17: provided that the manager may pursue action against the former mortgagor under the participation bond for the recovery of any such loss; |
| (c) |
the manager must file financial reports with the registrar on a quarterly basis giving an update on the matters set out in sub paragraphs (a) or (b), as the case may be, and indicating the manager's plan to safeguard the interests of participants. |
Public Service Commission Act, 1997
