Safe as houses? – Balancing a mortgagee’s security interest with a homeowner’s security of tenure
Lee Steyn argues that a balance is needed between a mortgagee’s security interest and a homeowner’s security of tenure. This is because the Constitutional Court, in Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC), set aside the sale in execution of the immovable properties of the appellants on the basis that it amounted to an unjustifiable infringement of their right to have access to adequate housing in terms of section 26 of the Constitution.
Following this, a number of reported cases have dealt with the issue whether the sale in execution of mortgaged property may constitute an infringement of the mortgagor’s section 26 rights and, if so, whether such infringement is justifiable in terms of section 36 of the Constitution. The author highlights the need for appropriate principles, policies and processes to be applied when a mortgagee seeks the sale in execution of a defaulting mortgagor’s home in order to provide a framework within which the required balance between a mortgagee’s security interest and a homeowner’s security of tenure can be struck. Insufficient predictability may lead to reluctance on the part of potential mortgagees to provide finance, which may well create the very “poverty trap” which the Constitutional Court sought to avoid in the Jaftha case.