Asked by the Customer on 25-04-2014 19:02:45
Question posted in the General Law category relating to Gauteng
Question posted in the General Law category relating to Gauteng
Hi
Im about to sign a loan agreement . The lender has requested that I offer something tangable in the event there is a breach which Im unable remedy forcing him to cancelation the agreement a sought legal remedy
I proposed the below against my wish and would like to know which of the two clauses is less onerous for me as a borrower and why if this matter is to lend in court?
a) In the event that the Borrower fails to pay the arrear amount after
three (3) months notice to pay has been given by the Lender, the Borrower
hereby grants the Lender a lien over the immovable property situated at xxxx, which is in the Borrower’s name and in which the Lender is only entitled to recover the balance outstanding as per this agreement
OR
b) In the event that the Borrower fails to pay the arrear amount after
three (3) months notice to pay has been given by the Lender, the lender will have a right to a lien over the immovable property situated at xxxx, which is in the Borrower’s name and in which the Lender is only entitled to recover the balance outstanding as per this agreement
Regards
MT
Im about to sign a loan agreement . The lender has requested that I offer something tangable in the event there is a breach which Im unable remedy forcing him to cancelation the agreement a sought legal remedy
I proposed the below against my wish and would like to know which of the two clauses is less onerous for me as a borrower and why if this matter is to lend in court?
a) In the event that the Borrower fails to pay the arrear amount after
three (3) months notice to pay has been given by the Lender, the Borrower
hereby grants the Lender a lien over the immovable property situated at xxxx, which is in the Borrower’s name and in which the Lender is only entitled to recover the balance outstanding as per this agreement
OR
b) In the event that the Borrower fails to pay the arrear amount after
three (3) months notice to pay has been given by the Lender, the lender will have a right to a lien over the immovable property situated at xxxx, which is in the Borrower’s name and in which the Lender is only entitled to recover the balance outstanding as per this agreement
Regards
MT
Further information relating to Question:
i will appreciate it if you can send me a diluted version which is less onerous
Message from the Attorney
Posted by Att. Patrick on 26-04-2014 17:58:33
Hi there MT,
The only way in which you can register a 'lien' over immovable property is by registering a bond over it. This is to be done by a conveyancer in the Deeds Office, who will also assist you with the necessary agreements to be drafted. This is not necessarily a cheap thing to do, and may cost about R5000 to R10000. So, perhaphs that would not be the best way forwards.
I would not suggest that you allow the lender to register any lien / bond over any immovable property.
A lien (right of retention, ius retentionis) is the right to retain physical control of another’s property, whether movable or immovable, as a means of securing payment of a claim relating to the expenditure of money or something of monetary value by the possessor (termed “retentor” or “lien holder”, while exercising his or her lien) on that property, until the claim has been satisfied.
So, you'll realise that if you pass a lien over some movable property (like your car), then you'll need to give the lender the physical possession of your car until the debt has been paid -- not something that you want to do either.
My legal advice -- don't grant the lender a lien over anything.
Rather: you should give the lender a list of some of the assets that you own. If you default under the loan agreement, then the lender must get a judgment against you, which will then allow the lender to attach some of your movable assets. This is the normal thing that people do.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
The only way in which you can register a 'lien' over immovable property is by registering a bond over it. This is to be done by a conveyancer in the Deeds Office, who will also assist you with the necessary agreements to be drafted. This is not necessarily a cheap thing to do, and may cost about R5000 to R10000. So, perhaphs that would not be the best way forwards.
I would not suggest that you allow the lender to register any lien / bond over any immovable property.
A lien (right of retention, ius retentionis) is the right to retain physical control of another’s property, whether movable or immovable, as a means of securing payment of a claim relating to the expenditure of money or something of monetary value by the possessor (termed “retentor” or “lien holder”, while exercising his or her lien) on that property, until the claim has been satisfied.
So, you'll realise that if you pass a lien over some movable property (like your car), then you'll need to give the lender the physical possession of your car until the debt has been paid -- not something that you want to do either.
My legal advice -- don't grant the lender a lien over anything.
Rather: you should give the lender a list of some of the assets that you own. If you default under the loan agreement, then the lender must get a judgment against you, which will then allow the lender to attach some of your movable assets. This is the normal thing that people do.
If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.
Att. Patrick
Please remember this is a dialog if you have follow up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.
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