Burying your head in the sand when struggling to facilitate asset loans often results in having a judgment to your name and ultimately having your property repossessed and sold for a fraction of the property’s actual (sentimental) value.
It is highly unlikely that properties that are sold on Sales In Executions Auctions meet reserve prices and after the property has been bought by an enthusiastic bidder, the previous bondholder is often met with the responsibility of paying whatever remains after the sale of the property.
Considering the time frames involved in serving sectional 129 notices as well as the entire court procedure that goes into mandating sales in execution auctions, sheriffs who have permission from the Minister of Justice to run Pre-judgment sales have created a niche market that will benefit all parties who would normally be involved in traditional sales in execution auctions, without the lengthy and expensive process.
To give us more information about the process, advantages and disadvantages of pre-judgment sales, The Auctioneer met up with Head Sheriff of Sheriff Halfway House Midrand, Theo Sibert to impart more information about this new auction niche.
The Auctioneer – What are Pre-judgment Sales and can all sheriffs conduct them?
Theo Sibert – The pre-judgment process is not a legal process. It’s something we came up with when we saw a need for an alternative process to the lengthy and expensive court processes.
The Auctioneer – Can you explain the pre-judgment sales process?
Theo Sibert – With regards to Rule 46A, which requires everybody to comply with judicial oversight, in some instances, a defendant would probably not want to go to court and willingly have their property seized from them and auctioned for a fraction of the property’s value. More often than not, this results in the defendant receiving a judgment to their name. To avoid this, we’ve identified a niche market that follows a similar process to Sales In Executions however differs from Sales In Executions in that the sale happens when a defendant gives us (the sheriffs) a mandate to sell the property to a third party, prior to a judgment being served. If we manage to sell the property to a third party and both the defendant and plaintiff agree to the selling price, then the whole judicial process stops there.
The Auctioneer- Can you perhaps spotlight the advantages and disadvantages of pre-judgment sales
Theo Sibert – Okay. The advantages of pre-judgment sales are that neither of the involved parties have to go to court. The defendant doesn’t get a judgment, all involved parties save a lot of money and time. Most importantly, once the property is transferred to the name of the new purchaser, the defendant and the plaintiff walk away as the problem is solved. The disadvantages of pre-judgment sales are that not all sheriffs have the legal authority to run prejudgment sales unless they have permission from the Minister Of Justice.
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