Signing a contract for the purchase of immovable property is serious
and exiting it unscathed is often impossible. As with any contract, it creates rights and obligations for both parties thereto. These rights and obligations must be adhered to, as failure may result in the innocent party claiming damages or specific performance. This article serves to be informative in terms of a quick remedy to an aggrieved party particularly during the commencement of the transaction when purchasing a property with diminutive value.
Section 29A defined
Excitement can quickly evaporate when an eager buyer realizes that what he had intended to purchase is not the actual property he envisioned., which section verbatim states that:
“a purchaser or prospective purchaser of land may within five days after signature by him or her, or by his or her agent acting on his or her written authority, of- (a) an offer to purchase land; or (b) a deed of alienation in respect of land, revoke the offer or terminate the deed of alienation, as the case may be, by written notice delivered to the seller or his or her agent within that period. (2) The period of five days contemplated in subsection (1) shall be calculated with the exclusion of the day upon which the offer was made or the deed of alienation was entered into, as the case may be, and of any Saturday, Sunday or public holiday. (3) The written notice contemplated in subsection (1) shall be effective only if it- (a) is signed by the purchaser or his or her agent acting on his or her written authority; (b) identifies the offer or deed of alienation that is being revoked or terminated, as the case may be; and (c) is unconditional. (4) Where an offer is revoked or deed of alienation is terminated as contemplated in subsection (1), every person who received any amount from the purchaser or prospective purchaser in respect of the offer or deed of alienation, as the case may be, shall refund the full amount of such payment to the purchaser within 10 days of the date on which the notice referred to in subsection (1) was delivered to the seller or his or her agent. (5) Subsection (1) shall not apply if- (a) the purchase price of the land, or the price offered for the land by the prospective purchaser contemplated in that subsection, exceeds R250 000 or such higher amount as the Minister may prescribe in order to counter the effect of inflation”
The protection afforded
The above section indicates that if the property is worth R250 000 or less, then the purchaser or his agent ie a person duly authorized to act on the purchaser’s behalf may terminate the offer within five business days from the date of signing the Offer to purchase without incurring any penalties. If the property is worth more than R250 000 or if the period of five days has elapsed since the signing the offer to purchase then the cooling-off period terminates. The cooling-off period makes provision for property purchasers falling under the lower income threshold and provides a measure of protection against certain costs which are triggered once an offer to purchase is signed. Interestingly, amongst the other provisions of the section, if a purchaser’s signs an offer to purchase within five days of the first offer to purchase, then the first offer to purchase is deemed to have been revoked, provided that the purchaser gives written notice to the seller after signing the second offer to purchase.
Importantly this section protects the buyer against all the subsequent penalties which may be incurred such as estate agent commission which remains largely unregulated in South Africa.
Contact us at Schoemanlaw Inc for all your property needs.