I ‘Notice’ You ‘Noticing’ Me: A Critical Analysis of the Section 129 Notice of the National Credit Act, and Recomendations for the Implementation of a ‘Specialised’ Foreclosure Notice

Section 129 of the National Credit Act provides that a creditor may not commence any legal proceedings to enforce a credit agreement before first issuing a section 129(1)(a) notice to the debtor. Thus, in a foreclosure context, should a mortgagee wish to enforce a mortgage agreement, he must first comply with section 129(1) and deliver a section 129 notice to the mortgagor. Should this not be done, any ensuing foreclosure proceedings could potentially be excipiable. Accordingly, section 129 has been described as the gateway to litigation and compliance with this section is paramount for debt enforcement. Unfortunately, section 129 has been the subject of much criticism and uncertainty due to its ambiguous wording and the resulting interpretation. Much of the uncertainty relates to the way in which the notice must be delivered and the contents of the notice. With specific regard to foreclosure proceedings, section 129 fails to alert the debtor about his rights and remedies and fails to notify the debtor of the full consequences of foreclosure. Consequently, the section has been amended several times. Unfortunately, the amendments have not resolved all the loopholes in section 129, and some of these amendments have created more uncertainty and ambiguity. Case law has, however, provided some direction as to the interpretation of section 129. Despite the amendments and case law developments, uncertainty still exists, and clarity is urgently required in relation to the interpretation and application of section 129 during foreclosure proceedings. It is accordingly suggested that certainty can only be achieved by implementing a specialised ‘foreclosure notice’.