Case Number: 13719/2016 High Court Gauteng. It has been held by a specially convened full court of this division that a court making a foreclosure order against a home-owner must as part of the process determine a reserve price in all but exceptional circumstances if the property is the home of the debtor. The foreclosure application is one of the processes specifically singled out for personal service by the rules. This is to avoid the process being undertaken without the court being satisfied that the debtor has been afforded an opportunity to be heard on what must entail his or her most fundamental rights. The determination of the reserve, it is a delicate judicial task which has as its central endeavour the balancing of the respective rights of the parties. This task is impossible without the court being reliably told what the market value of the property is under circumstances of a forced sale and the debts which will have to be paid in order for the transfer of the property to be effected- i.e. municipal rates or levies and amounts for which the property is mortgaged. The determination also entails a consideration of the likelihood of the proposedreserve price being achieved and the respective prejudice to the interested parties.
(If not sold)….a court faced with an application … is called upon to adjust the reserve price now taking into account, as one factor to consider, that the property has not sold for the reserve price..should at least:
seek specific relief in the notice of motion;
satisfy the court that the auction was properly advertised, at least, in
accordance with the rules;
assert that there are, to the best of the deponents belief, no reasons other than
the reserve price being too high which could rationally be said to be a reason
for the failure to achieve a bid at the reserve;
be brought as interlocutory to the main application so that the court is afforded
access to all documents in the main application and all other interlocutory
maters;
be brought as soon as possible after the sheriff’s report is issued;
explain any failure to hold the sale within six months of the handing down of the
foreclosure order;
Place before the court any additional reliable evidence of the true value which
could assist in the reconsideration process – for example information relating to
other recent property sales in the area.
If the auction was held more than six months after the foreclosure order was
handed down a court may wish to be furnished with a fresh sworn valuation.
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