8 Jun 2011
It may come as a surprise to many that South African conveyancers time and again find themselves faced with buyers who do not appreciate how binding and non-negotiable an offer to purchase is once the seller has accepted it and any suspensive clauses (e.g. the sale of another home or the granting of a bond) have been complied with.
It can be painful to have to point out that there is no escape route for the buyer between his offer being accepted and the transfer taking place other than in those cases where the seller has breached the terms of the contract. We regularly come across buyers who think that they have a right to veto the transfer - they do not appreciate that the registration of the transfer is simply the verification of a fait accompli, the acceptance of the offer. Should a buyer for some reason (e.g. a sudden financial crisis or the discovery of a better priced, more attractive property) want to get out of the deal he can approach the seller for leniency and the cancellation of the agreement and he can offer to pay compensation. However, the seller need not take notice of this and may reject the request. What all this comes down to is that contracts are sacrosanct in SA law and there can be no going back on them. This applies especially in property where the law stipulates that contracts must be in writing and signed. The Consumer Protection Act does not apply to one-off transactions between a seller who is not engaged full or part time in that business (e.g. selling homes). However if it can be shown that the estate agent, who is employed in this activity full or part time misrepresents the facts, confuses or fails to disclose important information to the buyer, it could in terms of the Act, be grounds for a court case against the agent. Where this is true of one-off sales the situation is different where the seller is a developer, investor or speculator, i.e. where he is selling the property in the course of his business to a private individual. In these cases, if latent defects are not disclosed or if the property bought by the purchaser differs materially from the specifications, the buyer may have the right to refuse to take transfer. Looking at the situation as a whole, however, it seems highly unlikely that they will be any radical change in the way SA property sale law is interpreted. Buyers, therefore, must take great care to do their homework, analyse their financial position and refrain from signing an offer until they are 100% certain they want and can afford the home. The latest FNB quarterly survey has shown a marked upswing in sales of township property but it is here that agents and conveyancers must take extra care to protect buyers (and sellers) from high pressure selling and hasty, ill informed decisions. *Ulrik Strandvik is from Cape Peninsula attorneys, Gunstons Attorneys