Both sides of the coin need to know this – Offer To Purchase | Legal Articles

 

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Both sides of the coin need to know this – Offer To Purchase

At Van Deventer and Van Deventer Attorneys, we can never overemphasise the importance of consulting with an attorney whenever property sale transactions are concluded. This is because the legal consequences of property transactions are serious and financially substantial. In this article we will discuss things that buyers and sellers in property sale transactions need to be aware and take note of so as to ensure their interests are secure during and after the transaction.

However this information is for general guidance only and we urge sellers and buyers to consult with us for comprehensive assistance as each case has its own merits, therefore the most suitable legal assistance for each case will have to be tailor made after consultation with us.

Offer to Purchase - buying a house in South Africa

Suspensive Conditions & Terms

As a buyer one needs to be satisfied that the terms and conditions in the Offer To Purchase (OTP) capture exactly what has been agreed between the parties. This follows also that the buyer must have inspected the property and ensured that the state or condition of the property is consistent with the provisions of the OTP. There may be a suspensive condition in the OTP e.g with regards to time frame of securing a bond, the buyer therefore needs to ascertain that this is adhered to otherwise the OTP will terminate by operation of law if the suspensive condition is not met in time.

‘Cooling off’ period

According to the Alienation of Land Act, a cooling off period of 5 days applies where the property transaction is of R250 000.00 or less where the buyer is a natural person. In the event that the buyer changes their mind within 5 days, they may terminate the offer by written notice to the seller or their agent without repercussions. This therefore means the cooling off period does not apply where the value f the property is more than R250 000.

In the event that the purchaser wishes to terminate the agreement where there is no effective cooling off period or the fulfilment of future suspensive conditions, there may be damages to be incurred provided that the seller or their agent are able to prove their losses.

The Consumer Protection Act6 of 2008

The Consumer Protection Act applies where the seller is in the business of buying and selling property, or where the seller is a property developer. Consequently where the sale is a “once-off” transaction the seller cannot be said to be a supplier as envisaged by the Consumer Protection Act. Further to the above, one must bear in mind that the Consumer Protection Act does not apply to a purchaser (a consumer), being a juristic person whose asset value or turnover exceeds R2 million.

Provisions of the Offer to Purchase

While the nature and form of an agreement dictates the information that must be contained in such agreement, it is accepted generally that a typical OTP must contain the following information amongst others;

  1. Identification and description of the property
  2. Parties and their identification particulars
  3. Marital status of the parties
  4. Purchase price
  5. Attendant conditions
  6. Obligations of the parties
  7. Transfer attorneys
  8. Tax provisions
  9. Occupation and transfer
  10. Commission of the estate agent
  11. Breach and cancellation clauses

Defects

With regards to latent defects, the purchaser has the onus to prove that the sellers had knowledge of such but did not disclose while knowing it could affect the decision of the purchaser. For patent defects the purchaser may be able to claim the damages suffered although it may be difficult if the contract has already been concluded.

Van Deventer and Van Deventer Conveyancing Attorneys

We assist in a wide array of matters including all types of contracts and property law. Contact us for an appointment and consultation with attorneys in our property department.

The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter. One should not act or refrain from acting on the basis of any content included in this site without seeking legal or other professional advice. The contents of this site contain general information and may not reflect current legal developments or address one’s peculiar situation. We disclaim all liability for actions one may take or fail to take based on any content on this site.

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


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