ASK THE EXPERTS
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Answer from Bruno Simao :
Thank you for your question . Let ’ s address the key issues and clarify your rights and potential actions by playing out different scenarios and facts .
FICA : Firstly , the estate agent should have verified the existence of the two directors registered with the CIPC , as required by the Financial Intelligence Centre Act ( FICA ). If the agent did not request this information , they are in violation of the Act and their duties to you . If , on the other hand , the wife was not a director at the time , then FICA compliance is not in question and the issue of authority becomes less significant .
Authority to Sign : It ’ s important to note that both directors do not necessarily need to sign the OTP . For example , a CEO often has the authority to conduct business on behalf of the company without requiring the co-signature of another director . However , this is something the agent might not know . The signatory who claimed to have the necessary authority could be held liable for damages if it turns out they did not , in fact , have such authority .
OTP Validity vs Bank Requirements : There is a distinction between the company ’ s authority to enter into agreements and the bank ’ s credit risk policies . If the bank requires both directors to sign the loan documents and act as sureties , this does not affect the validity of the OTP or the husband ’ s authority to act on behalf of the company in purchasing the property . It may however mean that the loan will not be granted .
Look for a Realistic Outcome : Your approach should be practical . Forcing a bank to grant a loan if it is unwilling is not feasible . Similarly , forcing a dissenting shareholder / director to sign a loan agreement or suretyship is challenging . If the refusal is related to the loan agreement , there might be some hope in seeking relief from the court . However , if the refusal is related to the suretyship , it is unlikely that a court would compel her to sign .
Possible Solutions : If you have evidence that all parties , including the wife , led you to believe there was appropriate authority , you might be able to enforce performance . However , this does not seem to be the case here . Depending on the OTP , you might have a claim for specific performance against the signatory . Additionally , a claim for damages might be appropriate if the signatory and agent did not act innocently . I really hope this helps .
Bruno Simao is an experienced property lawyer and the founder of BSA Law . He specializes in property law and evictions , providing expert legal guidance to protect clients ’ rights