Suspensive conditions when purchasing immovable property in South Africa: caution before signing the offer to purchase

In South Africa the majority of immovable properties are marketed via estate agents. In many cases, after one or more viewings, sale agreements are concluded through estate agents, who negotiate the terms of the sale agreement with the interested parties and the seller on the basis of their respective standard sale agreements. Contrary to other countries such as for example Germany, an agreement to purchase immovable property does not have be signed before a notary or similar institution in order to be valid. In practice, any additional or special contract clauses are often not thought through properly and formulated in haste. It is not an uncommon occurrence that major disputes arise prior to the registration of the property into the purchaser’s name, even to the extent that allegations are made to the effect that the sale agreement is null and void.

In particular, suspensive conditions require careful formulation, such as for example the financing of the purchase price for the immovable property, which may have to be secured by means of a loan or the proceeds from the sale of another property belonging to the purchaser. Obtaining assistance from an attorney prior to signing the sale agreement will ensure that the fulfilment of such suspensive condition can be objectively determined and that your interests will be adequately safeguarded.

Since the enforcement of the terms of a contract pertaining to an immovable property would in most cases have to be pursued in the High Court with significant legal costs awaiting the plaintiff before the relief sought can be obtained, one should make it a policy of not signing any sale agreement without having first obtained independent legl advice. For what good is it to the Seller if the Purchaser can suddenly opt out of the sale agreement due to the ambiguous formulation of the bond clause which threatens to render the entire agreement null and void? Or from the perspective of the Purchaser, where must he run to should it transpire that the transfer of the Purchaser’s property, the proceeds of which were to secure the greater part of the purchase price, is not specified with sufficient detail in the said agreement and the Seller now demands a guarantee for the balance of the purchase price?

Hildebrand Attorneys will be pleased to furnish you with advice when drawing up a sale agreement for the sale/purchase of an immovable property and in respect of other related issues such as the structuring of the transaction and the tax and estate planning consequences.

Tags: , , , , , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Web Design by Flutterby