Although it is difficult to avoid disputes when different parties interact, there are a number of ways in which some of these can be reduced if not totally eradicated. The idea behind reducing contracts into writing is premised on this realisation i.e to be certain of terms and obligations, so that disputes are minimised.

Property sale transactions are no exception, complications and disputes may arise at any point. However, avoiding such usually centres around making sure that the document at the centre of the transaction, the Offer to Purchase (OTP) makes provision for adequate information wary of unforeseen future possibilities.

Agreements are binding legal instruments and as a result, they have legal consequences which must be resolved through legal processes. It therefore becomes important that before any party affixes their signature thereto they must be satisfied that they understand and accept what is captured in such contract so that on the occasion of any eventuality, such party is fully prepared.

The Offer to Purchase (OTP) agreement in property sale transactions has standard terms and conditions on one hand, and special provisions inserted to suit the specific circumstances of the parties in the transaction on the other. Parties are at liberty to make such special conditions in consideration of what they specifically agree which suits their circumstances, as long as such are not illegal and contrary to public policy. Examples of these are such as the Seller being required to clear R10 000 arrears on the utility accounts if there are such arrears as the case may be, or that the Purchaser accepts at least one of the first three bond approvals to avoid long delays.

Standard provisions are those found in almost all OTPs across the board, and are therefore not a case by case scenario. Examples of these are provisions about purchase price, occupational rent, identification details of the parties and inspection of the property.

It is critical that parties in property sale transactions seek professional assistance before concluding the agreements as serious financial and legal implications arise upon such conclusion. The interpretation of some provisions may only become important when disputes arise, but that at the time when the agreement was concluded the meaning of the provision was taken at face value and not scrutinised.

What Should Your Offer To Purchase Look Like?

In the event that one cannot secure professional assistance, below is a general guide on what one needs to look at when concluding an Offer to Purchase Agreement.

• Identification of the parties e.g Purchaser, Seller, Transferring Attorneys
• Description of the property
• Occupational rent and date
• Consistency between the purchase price written in numbers and in words e.g 20, Twenty
• Suspensive conditions and the time period in which they must be fulfilled
• Estate agent commission
• Permanent and non-permanent fixtures on the property
• Rates and levy arrears
• Breach and Cancellation

While some mistakes in agreements may be corrected by insertion and signing next to such correction e.g property address, some may not be corrected in like manner. For example in the event that the fulfilment date for suspensive conditions has lapsed, it cannot be cured by changing the date on that agreement as it would legally have been terminated. To extend such date the parties will need to conclude and attach a separate addendum before the initial date has lapsed.

Varying a contract is not the same as correcting or rectifying a provision already contained. For example, where the property address is incorrectly captured as 38 Dudley Street whereas it should be 28 Dudley Street, such can be rectified by changing from 38 to 28 and signing next to it. However, where parties want to factor in further provisions, such is what amounts to varying the contract. In the case of immovable property sale transactions, the original agreement and the variation addendum must both be in writing to comply with the Alienation of Land Act 68 of 1981 which requires this to avoid malpractice, uncertainty and forestall disputes.

As alluded to above this is a general guide and we strongly advise parties to seek professional legal assistance before concluding property sale agreements.

Phoenix Bonds - Property Experts and Bond Originators

Phoenix Group expertly specialises in bond origination to secure the best deals on your next home loan, and bridge financing. Our approach is professional and comprehensive. We commit to providing you with the best service in this respect.

The information contained in this site is provided for informational purposes only, and should not be construed as legal and/or financial advice on any subject matter. One should not act or refrain from acting on the basis of any content included in this site without seeking professional advice. The contents of this site contain general information and may not reflect current developments or address one’s peculiar situation. We disclaim all liability for actions one may take or fail to take based on any content on this site.