Real Security Rights

Question 1

Define real security and to distinguish it from personal security

Answer 1

RR - Gives creditor a limited real right in property that belongs to the debtor + Regulated by law of property

PR - Gives creditor a personal right against a third person who undertakes personally to settle the principal debt if the debtor fails to do + regulated by the law of obligations

Question 2

Explain why real security also forms part of limited real rights

Answer 2

• Iura in re aliena - rights in the property of another
• Confer limited and specific entitlements on their holders and are enforceable against third persons

Question 3

Set out the main categories of real security, to list the various forms under each category and to distinguish them from each other.

Answer 3

Express real security rights
Tacit real security rights
Judicial real security rights

Question 4

Set out the legal nature of mortgage bonds over immovable property

Answer 4

Res in commercio - Immovable property must be in existence at same time mortgage is created

Question 5

• Distinguish between different forms of mortgage bonds

Answer 5

• Kustingsbrief: provides security payment for purchase price of mortgage property
• Money lent and advanced: security for money lent and advanced by the mortgagee to the mortgagor
• Covering bond: provides security for payment of future debt
• Surety Bond: Registered against the property of a surety of the debtor, who undertakes to give security to the creditor for the payment of the principal debt by the debtor
• Participation Bond: Provides for security for funds which various individuals have invested in a company that runs collective investment scheme

Question 6

Discuss the different rights and responsibilities of parties to a bond agreement.

Answer 6

• Mortgagee has preferential claims to proceeds in sale of execution of mortgage property

Question 7

Set out the additional clauses of mortgage bond agreements and to apply the principles to factual situations

Question 8

• Explain how the mortgagee can enforce his/her rights and how real security functions in reality

Question 9

• Discuss new developments flowing from the Constitution and to analyse these developments critically with reference to case law

Question 10

• Develop a motivated opinion whether the right to access to housing ought to be prioritised above real security

Question 11

• Explain how a sale in execution is carried out and implications thereof

Question 12

• Set out the various ways in which mortgages may be terminated

Question 13

• Explain the concept “notarial bond”, how it functions and to provide examples thereof.

Question 14

• Distinguish between mortgage bond and pledge

Question 15

• Set out the essential elements of a pledge and to determine whether they have been complied with in given factual situations

Question 16

Explain how a pledge is vested and may be terminated

Question 17

• Distinguish between negotiated real security and real security by way of operation of law

Question 18

• Explain what a tacit hypothec is, how it functions and to provide examples thereof.

Question 19

• Critically discuss whether property belonging to a third party may also form the object of the lessor’s hypothec – also with reference to case law.

Question 20

• Explain what judicial pledge is and how it functions

Question 21

• To provide a list of other limited real rights, excluding servitudes and real security and to explain how these rights function

Question 22

• Know which statutory measures and legislation are relevant with regard to real security, when it becomes relevant and the impact thereof

Question 23

Bock v Duburoro Investments

Question 24

Standard Bank v Saunderson

Question 25

ABSA v Mokebe

Question 26

Janse van Rensburg v Mahu Exhaust

Question 27

Humair v National Commissioner of the SA Police Service

Question 28

Jaftha v Schoeman, Van Rooyen v Stolz