Can you make changes to an offer to purchase?

Private Property South Africa
Lea Jacobs

Amendments to an offer to purchase agreement have to be accepted by both parties in order for it to be binding.

Making even minor changes to a sales agreement can have an impact on a deal because nothing is set in stone until both the buyer and the seller agree on all the fine print.

You would think that this would be patently obvious, because the moment something is changed in an offer to purchase document, it becomes a counter offer, subject to acceptance by the other party. This was reinforced by a recent High Court case which highlighted the dangers of assuming that an offer will be binding even though changes have been made.

The case in question:

One such example involved a property for which a buyer had made a written offer of R6.3m, subject to certain terms and conditions. One of these conditions was that a building inspector would inspect the property - at the purchaser’s expense - within 14 days of the offer being accepted.

The seller purported to accept the offer by signing the offer to purchase, but instead of returning it unamended, certain changes were made. Firstly, the respondent deleted a portion of a clause, which provided thus:- “If the suspensive conditions referred to in Paragraph 6 and, if applicable Paragraph 14, are not fulfilled and subject to the purchaser not being in breach, Adrienne Hersch Properties CC shall refund to the Purchaser the deposit from which a fee will be recovered for the administration of the Trust Account and further: “This is not a suspensive condition and the acceptance of the offer will result in a binding agreement of sale”.

In other words, if an agreement had come into existence (which it didn't) and the buyer had then pulled out of the sale because of something the building inspector brought to light, the buyer would then have had to forfeit an administrative fee to the seller. However, the sale was never concluded on the original terms because the seller, in essence, made a counter offer.

For reasons not discussed in the actual court case, the potential buyer handed over a deposit of R630 000 before the parties had reached consensus and before an agreement acceptable to both parties had been concluded. On becoming aware of the changes to the offer to purchase, the buyer notified the seller that these were unacceptable and as such she was not willing to purchase the property subject to the seller’s amended terms and conditions.

Nevertheless, this did not entitle the seller to rely on certain terms and conditions of the “agreement” and claim an administrative fee of R330 000. Although a deposit had been paid, the underlying foundation and reason for the deposit to be paid was lacking.

The court found in the potential buyer’s favour and ordered the seller to refund the sum of R330 000, as well as any interest accrued. It also ordered the seller to pay the legal costs of the potential buyer.

Reading between the lines, it’s highly likely that the buyer and seller had some sort of verbal agreement in place. However, as with everything property, nothing is binding unless it's reduced to writing - something that needs to be remembered when you're buying or selling a home.

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