Cooling Off in the Context of Property Purchase Transactions & The Consumer Protection Act | Legal Articles

 

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Cooling Off in the Context of Property Purchase Transactions & The Consumer Protection Act

Some of us have had an experience whereby while walking in the mall after buying a pair of shoes, you come across another shop having the same type of shoes, same or better quality, at sometimes a lesser price.

For most, an urge to return the pair that has already been bought and get a refund, so that you can buy the newly discovered deal and keep some change, immediately kicks in. So strong is the feeling that even when one forces himself/herself to ignore and let it be, the next few days one is still bothered by the urge to return the shoes and get the cheaper deal.

In a property market where options are plenty, it often happens that purchasers may stumble upon a better deal soon or a few days after signing off the previous one.

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Cooling Off Period & Property Purchase South Africa

The Alienation of Land Act provides that for immovable property sale transactions of R250 000 and below, a cooling off period of 5 business days applies. In this period the purchaser may notify the seller and revoke the offer with no consequences.

This was done for policy considerations in order to shield purchasers in low-income transactions from attendant costs such as agent fees and so forth.

Inversely this means that where 5 business days have passed, or where the immovable property sale transaction is more than the R250 000 threshold, the 5-business day cooling-off provision does not apply.

This definitely should not be interpreted to mean that the purchaser cannot cancel the contract after the 5 days or where the transaction is above R250 000, they can do so. However, this will most likely be coupled with attendant costs that cater for the seller’s and agents’ inconvenience and provided that the aggrieved parties prove these, the purchaser who revokes the offer will have to pay for them.

The Consumer Protection Act and Offer to Purchase in South Africa

The Consumer Protection Act 68 of 2008 in Section 16 on the other hand, provides that a purchaser, who concludes a transaction as a result of direct marketing, is afforded 5 business days to cancel the sale. This option is only available to purchases made as a result of direct marketing e.g physically, by telephone, email, SMS etc.

It follows therefore, that purchases that are not as a result of direct marketing, are not subject to the 5 business days’ cooling off e.g goods bought at an auction.

Van Deventer & Van Deventer Incorporated - Property and Conveyancung Attorneys South Africa

You will absolutely have fond memories from our comprehensive and specialist services in Property and Consumer Protection law. We also assist in a wide array of other areas of law as per our website. Kindly make contact with us for comprehensive assistance in these and other matters.

 

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