Agreements of Sale of Immovable Property

By Barbara van Rooyen, Partner in the Property & Conveyancing department

In todays modern world, where most people have access to the internet, it is easy to obtain a template of a sale agreement for immovable property.  However, certain legalities have to be complied with in order for the agreement concluded between the parties to be valid and binding.

In terms of Section 2 of the Alienation of Land Act (No. 68 of 1981), in order for an agreement relating to the sale of immovable property to be valid, it must be in writing and signed and dated by both parties (i.e. the seller and the purchaser).  At the very least, the agreement must contain a description of the seller and the purchaser, a description of the property being sold,and the purchase price.  These are known as the essential terms of the agreement.
But that is not the end of the matter.  Additional terms which are material to the sale must also be recorded in the agreement.  These material terms are not easy to define but one must bear in mind that if a material term has not been finally agreed upon and is left open for further negotiations, there is no valid agreement.  When dealing with the sale of immovable property, examples of material terms include  the manner of payment of the purchase price, the time within which the purchase price must be paid, the suspensive conditions and any other special conditions, as well as the occupation date and any occupational rental which may be payable.

The method or manner of payment of the purchase price must be clearly set out.  In a pre-printed agreement, any options not exercised must be deleted as any defect may render the agreement void.  The parties must set out if a deposit is payable and when it is payable.  If the purchaser requires mortgage finance to buy the property, then the amount required as well as the date by when the finance must be approved must also be clearly set out.
The sale of immovable property usually includes the fixtures and fittings.  These are items that are permanently attached to the structures or buildings on the land.  There are some ambiguous areas, namely structures such as sheds and wendy-houses, items used in conjunction with a fixture such as garage door remotes and batteries for solar power systems.  Should the purchaser wish to include these types of items in the sale, the clause setting this out needs to be as specific as possible.  It is difficult to enforce verbal agreements in this regard.

A suspensive condition is a material term and therefore must be in writing and clearly set out in order to avoid uncertainty.  The sale being subject to the purchaser obtaining mortgage finance is a standard suspensive condition.  If the event does not occur, ie the purchaser does not obtain bond approval, no agreement comes into existence.

It is important to make sure that all blank spaces in the agreement are filled in or crossed out.  If there is no consensus between the parties in respect of something that has not been filled in, there is no agreement.

If in any doubt as to whether your agreement is valid and binding, consult with an attorney specialising in property who will point you in the right direction.

For more information on the above contact
Barbara van Rooyen on 035 780 7250 or