Real Estate Investor Magazine South Africa November 2014 | Page 37

BY KARIEN HUNTER

LEGAL

Property Sales

Agreements
O

ften, sale agreements – on closer scrutiny –
are not worth the paper they are written on.
If what is actually sold and the terms of the
sale are not properly reflected in the agreement of sale,
the agreement is either invalid, or can beset aside by
the court. What is not reflected on the sale agreement,
does not exist. Some of the most common pitfalls are
detailed below.

1. A lack of a proper description of the property sold
For an agreement to be valid, it has to be in writing.
Every aspect of the sale must be in writing, most
importantly, the property description. With sectional
title, this will include a reference to the name of the
complex, the Unit number, and any Exclusive Use areas
allocated to that particular unit.
However, often only the unit number is mentioned
on the sale agreement and no mention is made of the
Exclusive Use areas allocated, which should be notarially
registered against the title deed as an Exclusive Use area
with a specific number. For all intents and purposes,
the property has then been sold excluding such area.
Conveyancers can only transfer what was sold – and
this excludes any exclusive areas not reflected on the
sale agreement. The purchaser would have the perfect
excuse to cancel the sale agreement.
2. Unneccessary use of suspensive conditions
Most sale agreements contain suspensive conditions,
for example, that the sale is subject to the purchaser
being able to raise a bond, or subject to the sale of the
purchaser’s property. Both these instances are future,
uncertain events and the sale is ‘subject to’ such event(s).
However, agents often misconstrue this and would
make a sale ‘subject to’, for example, the seller fixing a
roof. In such instance, agents are advised to avoid the
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Not always worth
the paper it’s written on

use of the words ’subject to’ but to rather make it a term
of the agreement to which the seller would have to
adhere to within a certain time frame: ‘the seller shall
attend to the repairs to the roof as set out in the written
quotation annexed to the sale agreement, at his own
expense, no later than__(insert date)’. Should the seller
fail to do so timeously, the purchaser can simply place
the seller on terms to perform, or sue for the costs of
doing the repairs himself, but the agreement will not
automatically fall away and become of no force and
effect if the repairs were not attended to by a certain
date.
3. Failure to properly identify signatories
If a sale agreement is only signed on behalf of the
seller by the one spouse in a marriage in community
of property, then there is no sale. Likewise, where a
trust purchases or sells a property, all trustees have to
sign, or a resolution needs to be in place, authorising
one person to sign on behalf of the trust – before the
agreement is signed.
4. Failure to initial changes
Any change to a sale agreement effectively constitutes a
counter-offer which needs to be signed by both parties
in order for the contract to be valid. So, if the seller has
in principle accepted the purchaser’s offer, but added
a clause to the sale agreement to the effect that his
precious cycads would not form part of the sale and
would be removed by him on transfer, then there is no
agreement – unless the purchaser has agreed to it and
initialled the clause in question.

RESOURCES
AMC HUNTER
November 2014 SA Real Estate Investor

37