A Gauteng High Court judge has cautioned attorneys and home loan providers that there will be no shortcuts in matters involving the forced sale of people's homes at auctions, reports Fin24. Judge Denise Fisher has ruled that if the reserve price set by a judge hearing the sale-in-execution matter is not achieved at auction, the matters must be brought back to court on a proper application, with proper notice to the affected homeowner. In addition, it will not be heard through a ‘rote approach’ in chambers as has been happening. Fisher had before her four matters brought by Changing Tides (the trustee of the SA Home Loans Guarantee Trust) which had been sent to her, in chambers, in which the reserve price had not been reached. All had previously been dealt with under Rule 46A, which was introduced in about 2018 amid claims of collusion and corruption, with people's homes being sold for far less than they were worth. In one reported case, a home was sold for a mere R10 when it had a municipal valuation of R81 000. Rule 46A, and judicial pronouncements on it, requires a judge to set a reserve price in a matter where the property is the primary residence of the debtor. Fisher said this process was ‘relatively clear,’ designed to protect the homeowner while allowing for the commercial necessity of execution.
It specifically stated that the debtor must be personally served with court papers, so that the court could be satisfied that the debtor had been afforded an opportunity to be heard. However, she said, the portion of the rule which deals with what happens if the reserve price was not achieved at auction had not been framed with the ‘same precision.’ ‘If a property is sold at a price which is significantly below true market value, the home-owner is liable to lose the investment made in the property and still be indebted to the bank for more than is fair,’ she said. Fisher said there seemed to be a common temptation by lawyers ‘who may be justifiably fatigued’ to do as little as possible when faced with matters where reserve prices had not been achieved. And the four cases before her were an example of this. She said in each the original documents which guided the setting of the reserve price were not before her, there was no proper explanation from the sheriff as to what had occurred at auction, and the attorney had simply sought orders authorizing the sales with reduced reserve prices, or none at all. None of the documents had been served on the home-owners because, she was told, they were not ‘applications’ and it was not required, reports Fin24.