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Interpleader Procedure: Understanding a third party’s claim to attached property

Interpleader Procedure: Understanding a third party’s claim to attached property

The law affords a landlord the right to attach and sell a tenant’s movable property in order to recover arear rentals. This right is known as the landlord’s lien or tacit hypothec. This right is implied by law and allows the landlord to seize and sell all movable property on the leased premises, to cover the tenant’s outstanding rent. This does however mean that a landlord could attach property that belongs to a third party, but who has no obligation towards the landlord.

Unless the landlord is aware that some of the movable property belongs to a third party, the landlord’s hypothec will extend to the third party’s property, and they will not be allowed to remove said property from the leased premises. The third party will then have to approach the court, by way of an Interpleader, to have their property released.

An Interpleader is a procedure that happens during an action. This means that once a third party claims that the property under attachment belongs to them, the landlord cannot proceed to sell any of the attached property, until a court has decided who the property belongs to.

In order to institute an Interpleader, a third party needs to lay a claim to the attached property, with the Sheriff who attached the property. The third party will also have to provide the Sheriff with an Affidavit in which they explain why they have a claim to the attached property, and provide some kind of proof or substantiation for this.

Unless the landlord agrees that the attached property does belong to the third party, there has to be a formal court application, during which the third party has to provide the court with some evidence that they are the real owner of the property. The court understands that owners do not always keep receipts of their purchases. Therefore, oral evidence is allowed and a third party may call witnesses to corroborate their story.

The third party simply has to show on a balance of probabilities that they are the true owner of the attached goods. Once a third party has proven ownership, the landlord’s hypothec falls away, and the attached goods must be released.

Although third parties have a right of recourse with the Interpleader proceeding, it can be very costly and time consuming. It is thus advisable for a third party leaving their property on leased premises to inform the owner of the premises that they are the owner of said property.