The Office of the Judiciary has announced new rules that change how a person’s primary home can be sold in execution when they fall behind on payments.
These amendments to the High Court rules, published in Government Gazette No. 8719, are aimed at giving stronger protection to homeowners while maintaining fairness for creditors.
What Has Changed?
In the past, once a creditor obtained judgment against a debtor, their home could be declared executable with fewer procedural hurdles. The new rules now introduce stricter safeguards:
• Advance Notice: Before a primary home can be sold, the debtor must receive formal notice and be given the chance to explain their financial situation to the court.
• Court Inquiry: Judges are now required to hold an inquiry into whether selling the home is the most suitable way to settle the debt, and must consider the debtor’s personal circumstances as well as alternatives such as instalment payments.
• Valuations: At least two independent professional valuations of the property must be obtained. The home cannot be sold for less than its fair market value, which prevents homes from being auctioned off at unreasonably low prices.
• Auction Rules: Bidders at such sales must attend in person, pay deposits upfront, and bidding below the determined market value is no longer allowed when the property is a primary home.
• Oversight: The process is subject to closer supervision by the court and deputy-sheriffs, with strict timelines for filings and notices.
Why It Matters
For homeowners, this means greater protection from losing their primary residence too quickly or at unfairly low values. The court must now weigh up whether the forced sale of a home is appropriate in each case, looking at repayment options and the debtor’s broader circumstances.
For creditors, while the process may take longer, it ensures transparency and reduces the risk of disputes or legal challenges later on.
