Individuals shaking hands in front of house

Update: Execution against immovable property for a prior owner’s debt

Recent case law and the media has had potential property buyers up in arms regarding amounts owed to the municipality that were incurred by previous owners.

The question is, when can a municipality sell a property to discharge debts owed by prior owners?

This was answered by the court in the case of Stand 278 Strydom Park (Pty) Ltd v Ekurhuleni Metropolitan Municipality (GJ) (unreported case number 23503/2014, 27/04/2015).

The court held that, a municipality can only approach a court for an order to attached a property, and sell it at auction to satisfy the debts of prior owners, after obtaining judgment against the prior owners who incurred the debt on the property.

In this specific case the municipality had not yet obtained judgement against the prior owners responsible, and consequently were not entitled to take legal action to attach the property in the hands of the new purchaser to discharge the prior owners’ historical municipal debt.

Although not conclusive, the judgement in the Stand 278 case is a step in the right direction. There are still a number of questions to be answered regarding the procedural aspects to be followed by the municipality.