Beware When Buying a Property at a Sale of Execution

Imagine you want to buy a property that is being sold because the previous owner could not pay their debts. This kind of sale is called a "sale of execution". It might sound like a great deal, but there are important things you need to know to avoid problems.

Section 15B(3)(a)(i)(aa) of the Sectional Titles Act

Before you can officially buy a unit (like an apartment) in a building where you share things with other owners (a sectional title scheme), you need a special certificate. This certificate confirms that all the money the previous owner owed to the group that manages the property (the body corporate) has been paid. Without this certificate, you cannot go ahead with the purchase.

Here is what the rule says in simple terms

The Registrar of Deeds needs proof from a conveyancer that all money owed to the body corporate by the person selling the unit is either paid in full, or that there is a plan in place that satisfies the body corporate on how it will be paid.

Why this matters at a sale in execution

At a sale in execution, the property is being sold because the owner failed to pay creditors (often the bond bank). The owner may also have stopped paying body corporate levies long before the sheriff's auction. Those arrears do not disappear with the auction. Section 15B(3) means that whoever takes ownership at registration is responsible for settling the body corporate arrears before transfer can register.

In practice this means the auction "bargain price" you saw on the sheriff's notice is often not the real price. You may have to settle months of levies, special levies, legal fees and interest on top.

Practical checklist before bidding at a sale in execution

• Request the body corporate arrears figure from the managing agent before the auction date. Ask in writing. Keep the email reply.
• Check for special levies raised but unpaid in the past three years. These attach to the unit and you inherit them.
• Confirm rates and services arrears with the municipality. Same rule applies: rates clearance must be paid before transfer can register.
• Inspect the unit if at all possible. Sales in execution are typically voetstoots and the buyer carries the risk of latent and patent defects.
• Read the conditions of sale issued by the sheriff before bidding. The deposit and balance terms are non-negotiable.

Related Africa Estate guidance

• Can a body corporate withhold clearance certificates?: the High Court limits on what a body corporate can refuse, but levy arrears must still be paid.
• Body corporate and levies explained: full overview of trustees, AGM, levy calculation, arrears and CSOS recourse.
• Sectional title vs freehold: the ownership form that triggers Section 15B clearance requirements.
• The residential transfer process explained: where clearance certificates fit into the conveyancing sequence.

Considering a bid at a sale in execution? Contact Africa Estate before the auction. We will request the body corporate arrears figure and the rates account on your behalf so you know the real total cost before you raise your hand.

This article is informational. Section 15B(3) of the Sectional Titles Act 95 of 1986, the Sectional Titles Schemes Management Act 8 of 2011 and the Magistrates' Court Rules governing sales in execution apply. Always consult a qualified attorney before bidding at a sheriff's auction.