A reader who submitted an offer to purchase a property has discovered a number of potential problems with the dwelling but believes she will not be adversely affected as there is no agreement of sale as yet.
It appears certain of the improvements over the years were effected without proper consent and that extensions to the dwelling overlap the boundary with the neighbouring property.
See the reader’s question here.
It seems that the distinction between an offer to purchase and an agreement of sale can cause some confusion.
Simply put, an offer to purchase that complies with the necessary formalities generally constitutes an agreement to enter into a contract for the sale of property until the offer has been signed by the seller.
Upon acceptance by the seller, the offer becomes a contract for the purchase and sale of the fixed property.
It is for this reason that when making an offer for the purchase of a property you should ensure it is made on a comprehensive basis.
This means it includes all necessary provisions and conditions to ensure that all bases are covered upon acceptance by the seller.
The fact that certain conditions may be included in an offer does not detract from the nature of a binding contract, assuming that both parties have signed.
In the Alienation of Land Act, alienate means to sell, exchange or donate, irrespective of whether such sale, exchange or donation is subject to a suspensive or resolutive condition.
There are a number of formalities required under the act which include the names and addresses of the parties, a description of the land and if the land is subject to a mortgage bond.
In addition, other details required are the purchase price, the date upon which the purchaser can take possession of the land and the date on which the risk, profit and loss shall transfer to the purchaser.
The act states that the addresses recorded in the agreement shall serve as domicilium citandi et executandi (the address to which legal notices can be sent).
Accordingly, such addresses shall be used by the parties for service of documents of legal proceedings.
It is also important to include the aspect of costs in terms of which party shall be liable for the drafting of the agreement and transfer costs.
The purchaser is entitled to select the language in which the agreement shall be drawn up and the seller is obliged to provide the purchaser with a copy of the concluded agreement within 30 days.
This provision can be useful where an offer is submitted but the seller fails to provide the purchaser with a copy, which may lead to him not being entirely sure whether or not it was accepted.
In such an instance, the purchaser could insist on the seller making a copy available.
In the current instance, had the reader been aware or suspected that issues existed with the building, provision could have been made in the agreement for confirmation that all plans were properly submitted and approved as a suspensive condition.
A suspensive condition requires fulfilment within a certain period of time, failing which the agreement of sale lapses.
As an alternative, the reader could have requested proof of compliance with all building regulations on or before a specified date.
This would allow the seller time to remedy any defects in the property without necessarily prejudicing the sale of the property.
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