Written for YourProperty
This week our Property Poser experts shed light on the transfer process and how long it typically should take.
A reader made an offer to purchase a property – subject to obtaining a bond to finance it and selling her existing property within three months.
However, the property that she purchased is one of two houses on a piece of land that was to be subdivided into various stands for a cluster housing development.
The Section 21 company, which will form the basis of the homeowners’ association, has not yet been established. The reader was told that this would take about four months and the successful establishment of this entity was made a condition of the sale.
Other conditions were also set at the outset, such as those relating to the eviction of the current tenants and so on.
The reader is now extremely frustrated as she has since sold her old home and has been forced to rent accommodation elsewhere while waiting for the new transfer to be finalised.
She has paid a deposit on the property and asked that a provision be added to the contract of sale stipulating a time limit on when the transfer will be lodged. Her intention is to withdraw her offer if this is not done in time.
The first point to highlight, says Charlotte Vermaak from Chas Everitt in Port Elizabeth, is that once all the formalities are met and the offer to purchase is accepted by the seller, a contract of sale exists.
“The purchaser cannot then simply withdraw her offer as she may be in breach of the contract.”
Vermaak says this is also the reason why the seller does not have to agree to additional provisions; the parties are bound to the terms of the agreement contained in the original document. “It can only be amended in the manner set out in the contract of sale, typically by written agreement.”
The wording of the conditions should be examined to determine whether the contract is subject to a resolutive or a suspensive condition, says Vermaak. “A suspensive condition suspends the operation or effect of the contract (although the contract itself is valid) until one or more specified conditions are either fulfilled or waived.”
Conversely, a resolutive condition renders the contract null and void when one or more specified conditions are fulfilled, says Rian du Toit from DTS Attorneys in PE.
According to Du Toit, one typically finds suspensive conditions in property sales unless there is a particular reason for using a resolutive condition.
Du Toit says the reader’s contract should specify what measures may be taken should either party not fulfil the terms of the agreement.
“It should state how the aggrieved party should go about placing the defaulting one on terms and what notice should be given for the defaulter to remedy the situation.”
It should be noted, says Du Toit, that where no timeframe is determined for due performance, a reasonable period may be ascribed.
“What is considered reasonable depends on the circumstances. The reader may have to place the seller on terms allowing a specified period for performance without the seller being in breach of contract.”
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