Connected persons

The law of New Zealand forbids the bank from buying in the property: “(1) A mortgagee who exercises a power to sell mortgaged property may not become the purchaser of the mortgaged property except in accordance with section 196 or an order of a court made under section 200”.[1] Under the US commercial code, the following is indicatory of behaviour that is not commercially reasonable in the car market: “the creditor buys back the vehicle then resells it at a significantly higher price”.  Yet this is normal in the ‘property in possession’ situation in South Africa.

Probably lawyers representing banks and those connected with them as well as bank employees and their families should be forbidden. The absence of this rule may explain why bank appointed attorneys often refused to accept reasonable offers.

[1]Sub section 2 of  Section 176 of the New Zealand Property Law Act 2007.