An offer to purchase becomes a legally binding contract once signed by both parties.
Gerhard van der Linde, Seeff’s MD in Pretoria East, says to avoid any misunderstanding it is crucial that agents should inform all buyers from the outset that sellers can enforce the agreement once all the conditions have been met.
“If the buyer defaults, the seller can take legal action to ensure that the conditions of the agreement are upheld.
Buyers are often well aware of the legal implications of signing the offer to purchase, but sometimes try to get out of the agreement due to a number of factors, including buyer’s remorse, interest in a different property or a change in their financial position.
In terms of the agent’s Code Of Conduct the agent must explain all the terms of the Offer to Purchase to the both the buyer and the seller”.
Van der Linde says it is vital that the following aspects are included in the contract:
- The exact purchase price and any considerations given by the purchaser to the seller.
- Any conditions of sale, for example that the purchase price is dependent on the buyer getting a bond or selling a property.
- That the deposit will be held in a trust pending the completion of the sale and that interest will accrue to the buyer.
- That all fixtures and fittings that are part of the sales agreement are clearly stipulated as this is often an area of contention. By adequately specifying these items, conflicts can be avoided. Do not assume that anything is included, if there is any uncertainty, choose to specify this in the agreement.
- That the owner declares that to the best of his knowledge, the house is structurally sound. Although sellers often try to protect themselves from any claims by a “voetstoots” or “as is” clause, this will only protect them from claims where they were unaware of such defects. If the seller was aware of defects, hid them or failed to disclose them, this protection falls away.
- If the seller is in possession of approved plans, there should be an undertaking to provide a copy of these plans.
- If the home was recently constructed, a copy of the NHBRC certificate as well as occupation certificate may be need to be provided.
- Compliance in respect of electricity and electric fencing must be adhered to, and the agreement of sale should address these issues.