Personal security
When a creditor gains a personal right against a third party as security for the principal debt of the debtor i.e suretyship
Real security
Creditor gains a limited real right on the property of the debtor as a security until the repayment of the Pd.it gives an right of first preference
General principles applicable to real security
1, there must be a principle debt
2. Creditor gains a limited real right on the property of the debtor
3. Creditor gets preferential claim to the proceeds of the property upon default
4. Rs relates to the principal debt und all-interest there unless agreed against by the parties
5. Creditor may hold on to the property for the purpose of real security
7. Property of surety may be used for real security
How is real security created.
- By agreement
- operation of law
- court orders
Principles of special mortgage bond
- Is used for immovable property either corporeal an incorporeal( lease usufruct and servitude)
-is brought on by agreement
-First mortgager and mortgagee enter into agreement creditor then gains personal right then it needs to be registered At the deeds to turn into a limited real right?
Legal consequences of a mortgage?
- Ger is responsible for repayment of principal debt gee is responsible for calling up loan and selling the property if payment terms are not met but must first get Court under
-gee can not use or enjoy the property, ger may not grant other limited real rights over the property without the written consent of gee. Ger can collect or dispose of all natural fruits of property - ger can’t sell property unless mortgage is cancelled or the property is released from the operation of the mort with written consent of gee.
- gee is entitled to property and all improvements Theron including improvements after the bond was registered
- gee has preferential claim to the property if sold after insolvency of ger
What is a pledge
- Give l.r.r over movable property. Formed when both parties agree to formation and when property is delivered to gee. Ends when debt is repaid or gee gives up property voluntarily - destruction of pledge - time lapse of fulfillment of condition or sale after insolvency
- gee may not use or enjoy property must maintain it like reasonable person and is compensated after termination
-can apply for interdict if possesion is threatened.
What is a general notorial bond
- Applies to all movable property of the debtor
- No real security right
- registration helps as if debtor becomes insolvent creditor is entitled to free residue as they are bond holders
How can a bond holder of a g.n.b get a real security night?
- Claim must be perfected with perfection clause
- clause allows Bh to take possession of Db property under certain circumstances like default turning the g.n.b to a pledge
What is a special notorial band
- Registered over specific corporeal
- must be specified and described in registered natural band
- property is pledged,
Lessers tacit hypothec
- Created by operation of law
- when rentals fall behind lessor gains preferential gain to all movable property on premises but hypotheses ends when arrears are paid in full
-to become real security lessor must get court order to attach the property to premises thus perfecting it
Sellers tacit hypothec
- Creates preferential claim over property of installment sale agreement
- real security right
- loses ownership
- operation of law
Lien
- Used to secure repayment of money or labour that the holder extended to the immovable property of the owner ‘
- holder can retain possession of property but must take reasonable care of it
- can’t sale property in case of insolvency but gains preferential claim to proceeds of property
Enrichment liens
- When expenses are incurred for useful and necessary ( to preserve or protect ) works an property but not luxurious their increasing the market value of the property
Debtor and creditor liens
- When creditor expends money or laborer on someone else’s property in terms of a valid contract
- No real security but personal rights
- only enforced of contracted party
