A complete summary on what the right entails, when they are granted. What is a judicial pledge is and a lien which is very important for main exams as well as Capita Selecta in your final year.
The relevant case law is included.
19 Real Security Rights Created By
Law
Real security rights are sometimes granted to a person by operation of law, in the absence of any
agreement to this effect between the parties and even against their wishes.
The security rights arise automatically, if certain preconditions are present, in order to protect interests
that are considered important for the legal order.
Some of the security rights apply to immovable property and others to movables.
In some cases they assume the form of a pledge over movables, but as a rule the security rights are unique
as far as the requirements and contents are concerned.
Some of them are referred to as tacit hypothecs or liens.
Real Security Rights Created By Law
Tacit Hypothec Judicial Pledge Statutory Liens
Security Rights
TACIT HYPOTHEC OF THE LESSOR
The landlords hypothec is a real security right created by operation of law( and perfected by court order,
followed by attachment) to secure the landlord’s claim against the lessee for rent in arrears. The hypothec
applies to movables of the lessee on the premises.
THE TACIT HYPOTHEC OF THE CREDIT GRANTOR
The tacit hypothec of the credit grantor is a real security right with regard to movables, and it the secures
the credit grantor’s claim for outstanding payments i.t.o a credit agreement in cases where the credit
receiver becomes insolvent before payment of the last instalment.
JUDICIAL PLEDGE
A judicial pledge is the real security right which secures of creditor’s claim against a debtor, and is
established by obtaining a writ or execution against the debtor and attaching the property.
STATUTORY SECURITY RIGHTS1
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, LIENS
A lien or right of retention allows the holder of movable or immovable property to refuse to return the
property to the owner unless the owner pays an existing principal debt, which arose from expenditure by
the holder with regards to the property.
Lose all created by operation of law to secure outstanding debts.
Liens or retention, come into operation when one person is in control of movable or immovable
property of another person, who owes the controller money for improvements to or costs incurred in
relation to the property.
In certain circumstances the controller is then allowed by law to refuse to return the property to the
owner unless the owner pays the outstanding debt.
The right to withhold the property from it’s owner to enforce payment of debt is a lien.
Categories of Liens
A. DEBTOR- CREDITOR LIENS
A debtor-creditor lien is a lien which secures payment of a dept incurred in terms of a contract and is
therefore based upon a personal obligation that can be in forced against the contractual debtor only.
If the principal debt arose from contract the lien is called a debotor-creditor lien, which is enforced
against another contract parties only.
The basis for the lien is the contract; and the amount for which is valid is the amount due i.t.o the
contract.
This kind of lien cannot be enforced by or against anybody who is not a party to the contact from which
the principal debt arose.
In Singh v Santam Insurance: Santam who paid for repairs to Singh’s car was not allowed to enforce a lien
against Singh because the actual contract for the repairs was not concluded by Santam.
B. ENRICHMENT LIENS
A enrichment lien is a lien which secures payment of debt incurred by way of unjustified enrichment, and
which is therefore a real burden upon the property that can be enforced against any person who happens
to be the owner of the property.
The owner was enriched at the cost of the controller without good legal cause, the lien is called an
enrichment lien, which is enforced against anybody and not against a specific person only.
The lien is a real burden upon the property itself and it affects anybody who happens to be the owner
at a specific time.
The basis for the linen is unjustified enrichment, and the amount for which the lien be enforced is the
amount of enrichment.
In Singh v Stantam Insurance it was decided that there was no proof of unjustified enrichment (and
that no enrichment lien) because there was a valid legal justification for the expenses incurred: Santam
was responsible to pay for repairs in terms of the insurance policy.
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