Where a sale of rental income guarantee is made up so that the borrower`s rights to these rental incomes are at the end of the execution of the document and are transferred without delay and without conditions to the lender, the lender is immediately authorized by these rights. In these circumstances, the borrower`s action against the defaulting tenants can be met by the formidable defence that the borrower was not brought against unpaid rents for transferring such rights to the lender in a loan transaction. Lease income security transfers are often included in security transfer contracts and/or mortgage loan documents (borrowing documents). The assignment and transfer of agreements can be used when the rights and obligations arising from an agreement are to be transferred and transferred to another person. By signing an assignment and assignment, the Cedent undertakes to delegate to the Cessionary the right to claim money and all other benefits due to the Cedent in relation to the agreement. Why do I need a transfer of agreements? The reasons for the sale and assignment of an agreement are multiple and may include restructuring an organization, transferring a business or acquiring a debt. This transfer agreement provides for the transfer of rights and the transfer of obligations from one person to another. This is an approximation of the facts of Picardi Hotels Ltd/Thekwini Properties (Pty) Ltd 2009 (1) SA 493 (SCA) (Picardi case). A clause in a loan document included a standard security assignment of rental income. By particular application, the applicant argued that the applicant lacked jurisdiction to sue for unpaid rent.
In particular, the Supreme Court of Appeal (SCA) has it is regulated law (in South Africa) that a security transfer deprives the ceding party of the right to recover the debts transferred and that the Cedent retains only one dominatium or a right of reversion. In a simple, ordinary and grammatical interpretation of the loan clause, all the elements of an assignment were in place so that an effective and unconditional transfer of rights (from the murderer to the mortgage borrower) took place during the execution of the loan. The use of the current tension in the borrowing document was a strong indication of the intention for an immediate transfer of rights. The respondent was therefore stripped of the power to sue the complainant over unpaid rents. The respondent should have withdrawn from the bank a recession (of the rights surrendered) to give it the right to sue again for unpaid rents (recessionary rental rights). In such a scenario, the lender is assured that it will only hand over its security rights if the borrower absolutely asks it to recover the unpaid rent and the borrower is certain that it is taking legal action. The condition of the loan was that the mortgage bank could only claim the rights transferred with the agreement of the Mortgagors, unless the Mortgagor was late in the loan or the resulting loan. The SCA found that this did not mean that the security transfer was subject to conditions and would only take effect with the consent of the murderer or in the event of a delay. Mortgage fees have not been suspended until now.
What has been suspended is the ability of the mortgage to personally exercise these rights until default and termination are made. If the contrary interpretation was correct, namely that the transfer was subject to conditions and took effect only with the consent of the murderer or in the event of a delay, it would be destructive for the very purpose for which the security assignment was granted, the guarantee of the loan that the bank was to advance. This would mean that the mortgage bank would not have protection in the event of the murderer`s insolvency. When the reccide procedure is effective with the previous letter of application or the initiation of formal legal proceedings, the borrower is provided with the necessary means.