The development of a policy regarding homestead protection in South African law within the ambit of a comparative study on the US, England and Wales and South African law

Abstract

In 2005 the Constitutional Court was faced with a challenge on the infringement of section 26 of the Constitution which provides for the right to housing, in sales in execution. The court had to determine whether selling a debtor's home for a trifling debt would be justifiable. However, the decision of the court brought about many questions if such a similar case was to be brought under insolvency law. The South African system provides little or no protection for debtors who may find themselves in a situation where they are unable to pay their debts and stand to lose their homes. The court provided guidelines that should be taken when a home of the debtor is to be sold thus preventing a blanket ban. The approach taken by the courts ensure that both the debtor and creditors interests are taken into account in order to reach a just and equitable decision. Many factors have to be considered such as interests of children, creditors and any other dependants in the case of one facing sequestration and the possibility of the home being sold. However, South African law does not provide for formal protection of the debtor's home unlike in other jurisdictions such as the United States of America and England. These jurisdictions have either provided for exemption or protection laws through legislation in which such laws provide for a debtor's fresh start. International human rights also have to be taken into account thus the need for updated legislation that conform to the values entrenched in the Constitution. The English system developed its legislation to provide for home protection through case law, a similar approach of which could be taken by South Africa to bring the insolvency law up to date. There is need for our insolvency legislation to provide for clearer guidelines that enable a debtor to have a fresh start in life at the same time ensuring that creditors' rights are not infringed on. The English system aims to provide for such balance as it provides for protection for a limited duration of time unless if the value of the home is of a low value then it is exempt. The South African courts have also considered the creditor's interests were the home is subject to security as there is re luctance on providing that such property be exempt or protected. The sanctity of a contract has to be honoured.