Welcome to Scorpion’s Legal Tips! Every week we’ll share stories of injustice
and show you how you can strike back legally.
Tshepo* has been looking for a house for her family, so when she found out about an auction and that there would be houses for sale for a very good price, she decided to buy. The house had been sold by the bank. But when she arrived with all her stuff, ready to move in, she found another family already living there. What now?!
Tshepo applied for an eviction order to get the other family out of her new house, but when she went to court, it was found that the house belonged to the woman currently living there and that her husband had fraudulently used the house as surety without her consent. Tshepo has a problem now because the bank refuses to refund her for the house. And since the house was fraudulently put up as surety, it technically belongs to the woman who is living there. Eish. She just wanted a place to live. What can she do now?
Scorpion Legal Protection’s advice
An auction is a sale in execution. This is when a public auction is held by the Sheriff of the Court after a home loan could not be repaid to the bank. It is authorised by a court order that declares the immovable property, in this case the house, executable.
According to the Consumer Protection Act (CPA) 68 of 2008, a sale by auction to a consumer excludes any warranties and carries some risk for the consumer. Section 45 of the CPA sets out the procedure in conducting an auction. All auction properties are sold ‘voetstoots’, which means ‘as is’, and the bids are made in public, which means that you have no recourse if you make a mistake and bid for the wrong property. You also cannot negotiate the price if you later discover things wrong with the property you bought. This is why it is so important to thoroughly inspect any property you’re interested in buying before the auction and go through the conditions of sale in detail. If Tshepo had done this, she would have seen there was another family living in the house, and could have avoided bidding on the house.
Occupiers who become unlawful occupiers because of failing to pay their mortgage and consequently have their properties sold in sale in execution, must be evicted in terms of the Prevention of Illegal Eviction and Unlawful Occupation of Land Act, 19 of 1998. This would be the woman and her family still living on the house Tshepo has bought in the auction.
In this case, it was Tshepo’s responsibility to inspect the property and note that there are illegal occupants on the property. The court has not granted the eviction order due to the issue of fraud.
Tshepo can take the matter on appeal and join the bank as a party to the proceedings. She must be able to prove that the bank knew about the fraudulent surety to be able to withdraw from the sale and claim a refund, as the sale is legally binding on her. If it is proven that the bank genuinely did not know, it would be part of the buyer’s (Tshepo’s) risk and she will not be able to claim a refund.
Scorpion members have access to our 24-hour Legal Contact Centre and can call us anytime, anywhere for legal advice and assistance. They have peace of mind knowing that, when trouble strikes, they’ve got access to lawyers to represent them in court and help them strike back legally.*
* Terms, conditions, limitations and exclusions apply (click here to view the Legal Policy Document). This is only basic advice and cannot be relied on solely. Names have been changed to protect identity.