PROPERTY SALES: DON’T BE AN UNREGISTERED CREDIT PROVIDER! - Van Heerden v Nolte (19428/11)  ZAGPPHC 12; 2014 (4) SA 584 (GP)
The seller, the buyer, and the loans
When the seller failed to repay the balance, the buyer sued him.
The buyer’s summons, held the Court, was defective because it did not allege that the buyer had registered as a “credit provider” in terms of the NCA (National Credit Act). That, held the Court, was fatal to the buyer’s summons -
The trap (for all lenders, not just in property transactions) and the danger
If you lend money to anyone (as part of a property transaction or not) and if you are required to register as a credit provider but don’t, your loan agreement is unlawful and void. Your only chance of recovering your money then will be to sue for “unjustified enrichment” which has its own set of requirements for you to prove, and defences for the debtor to raise.
Don’t take a chance of falling into this little-known trap. If your property deal is structured in such a way that you may need to be registered as a credit provider, seek legal advice immediately, and certainly before you lend money to anyone.
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