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Understanding the contract.

“ Lack of knowledge is darker than night “  - African Proverb.

On average a person may be in the position to purchase a property once or twice in a decade. After the initial property search has been completed and having found a new home, the most important part of the transaction is to understand and correctly complete the written “Offer to Purchase”.

For an Offer to Purchase document to be valid and binding in South Africa it must include:

·         The name of the purchaser

·         The name of the seller

·         The description of the property

·         The price

·         It must be signed by both parties.


Suspensive Conditions are characterised by the fact that unless they are fulfilled by a specified date the sale does not go through and it  becomes invalid.

I would like to point out a few such conditions:

            Selling of another property

This suspensive condition is often included where the purchaser still has to sell his current house. This should not be a scary option as in the current market a well-priced property that is subject to the sale of a second property, is a perfectly good option. Ask the estate agent to verify that the property is sellable and allow for a reasonable time period for the second property to be sold. You may continue to market your property and should you receive another offer that you deem more favourable, you inform the first purchaser ( normally 7 days written notice ) to fulfil his suspensive conditions and produce the full purchase price.

One suspensive condition (more specific to auctions) called “ The gazumping clause” is where the seller can change his mind and pull out of the deal right up to the point when the property is transferred.  Usually because he has received a better offer. This Gazumping clause (found in countries such as Australia) can’t just happen in South Africa.  Because of our Roman Dutch law that states that once suspensive conditions have been met, there is hardly any chance of the collapse of the deal. In other words, neither buyers nor sellers can walk away from the sale.


            How the Purchase is Financed:

Specific conditions on how the property price is paid must be clearly dated and written in the contract. In the event of the purchaser not adhering to the payment times the agreement will become null and void. Should there be any delays in any payment; the purchaser must come to a new agreement with the seller by means of an Addendum to the agreement, or by amending the original contract dates with signatures of all parties concerned.

            Possession and Occupation:

Often the purchaser wants to take occupation of a property before the house has been registered into his name. Details such as: When, the Occupational Rent etc. must be clearly stated in the agreement. The seller remains in possession of the property and stays liable for the property until the registration of transfer has taken place.

            Commission Payment:

The seller is responsible to pay the commission earned by the estate agent. It is advisable to come to an agreement with the agent regarding the commission at the time of listing your property with them to sell. In Ballito commission varies with the norm at 7%. All commission attracts VAT and this must still be added to the percentage agreed upon.

            Consumer Protection Act:

Most agreements still have the “Voetstoots” clause but sellers are urged to disclose all defects  prior to selling their properties to protect them from the CPA. (Consumer Protection Act.) Sellers make sure that you have declared all latent and patent defects before the sale is concluded.

Other suspensive conditions:

Eg. ‘Due Diligence” or any other condition that either party wants to be included into the purchase of the property.

Suspensive Conditions regarding any maintenance or repairs to the property must be clearly stated with completion dates added. It is wise to include that any such repairs be done to the satisfaction of the purchaser or his nominee.



1.      Always read the whole agreement and make sure that you fully understand all the clauses and conditions. Take your time.

2.      Obtain a reputable lawyer that you can trust to handle the transaction and to take care of your interest.

3.      Start off by using a professional, qualified and certified Estate Agent to guide you along the way and to point out all the pitfalls.


As property professionals we take your purchase seriously and with our quality training, huge pool of knowledge and experience we will go the extra mile to protect the interest of both buyers and sellers when it comes to the contractual part of buying and selling a property.


CALL US ON : 032 946 2331



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