Buying a Property
All contracts to acquire land must be in writing, contain certain prescribed information and be signed by both buyer and seller to be valid and legally binding. Contracts most commonly take the form of an Agreement of Sale or Offer to Purchase which once accepted constitutes an Agreement of Sale. Once an Agreement of Sale has been signed by both parties it represents a valid and binding document from which neither party can withdraw without incurring legal consequences, save for certain instances where:
- the agreement is subject to certain conditions which are either fulfilled/not fulfilled;
- the purchase price is less than R250 000.00 and certain additional criteria in terms of the Alienation of Land Amendment Act are present entitling the Purchaser to "cool off".
The de facto ownership of property can also be obtained by means of acquiring the shares/members interest and loan claims in a company/close corporation respectively which company/close corporation is the registered owner of a property.
These contracts, strictly speaking, need not be in writing and can be concluded verbally which, although legally binding, is not advisable and it is recommended to record the agreement in writing to ensure that the material terms agreed to are accurately recorded.
It is important, furthermore, to note that only a natural person can acquire the members' interest in a close corporation. Accordingly, if it is intended for a non-resident company or trust to be the ultimate purchaser, provision can be made for the close corporation to be converted to a private company at a nominal expense to facilitate same and this should be a condition of purchase.
Accordingly the decision to enter into and sign an Offer to Purchase/Agreement of Sale is not a decision to be taken lightly and it is recommended that an inexperienced purchaser obtain independent legal advice if uncertain in any respect.
This section is broken up into the following categories: