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Suspension agreement

21 April 2011

I agree with Dudley Lee - see Suspension call, that Chief Registrars Circular 4/2011 should be withdrawn. The situation in forced sales is that the proceeds thereof are to be distributed in accordance with the laws of insolvency. A HOA is not a preferred creditor. The sale - and therefor the transfer is authorised in terms of a court order. Whilst the condition does not stand to be removed, the filing or not of a consent from a HOA cannot thwart a court order authorising transfer. The previous procedure followed by the Registrar was correct.

Bodies Corporate, whilst not preferent under the laws of insolvency have an effective preference in terms of the STA. HOA do not enjoy the same protection. To insist on a consent preceded by payment to the HOA is to prefer a creditor in contravention of the Insolvency Act. The remedy is a legislative one.

Mark Schäfer





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