Measure Twice, Cut Once

Private Property South Africa
Lea Jacobs

What happens when the dream home that you have purchased turns out to be a half-built, derelict shell? It couldn't happen to you? Well actually it could, if you don't pay close attention to exactly what is being bought and sold and that these details appear in the contract of purchase and sale.

Mistakes do happen and unfortunately, as in the case of a couple in Krugersdorp, the exercise could prove to be frustrating, litigious and fraught with difficulties.

The trouble it seems started when a couple saw a property offered for sale by Absa on a website. They went to view the four bedroomed, two bathroomed home, which according to the advert was situated at 37 Lotus Road, Krugersdorp. They liked what they saw and put in an offer for the full asking price, which they say was accepted by Absa. The money was paid into the bank’s transferring attorney’s trust account and all the relevant documentation signed. The keys were handed over and repair work, according to the couple concerned, to the tune of R200 000 was done.

Everything was going along swimmingly, until an estate agent enquired as to whether the couple would be willing to sell the stand which they had purchased. They must have been more than a little confused as their property had a fully-built home on the stand. However, on investigation, the awful truth dawned…what the bank had advertised and what the couple had seen was the wrong property entirely. In fact the two properties were not even situated on the same street – one was in Lotus Road and the other in Wagtail Place.

Now, put yourselves in their shoes. You see a property advertised, go to view it and decide immediately that this is the home for you. You sign the Deed of Sale, get the keys, invest in your new property by making renovations so that everything will be perfect when you move in and... the bank tells you that there has been a horrible mistake and you actually bought a stand with a half-built home on another street. The advertisement showed the dream home, that's the one you viewed, that's the one you renovated, but it's not the one you bought.

Can you imagine how the couple in question must have felt when they first heard that their dream had somehow turned into a nightmare? Having gone out on a financial limb, only to find that the branch was rotten, must have come as a huge shock. One has to assume that the gobsmacked buyers went through a gamut of emotions from astonishment to disbelief to self-doubt and eventually anger.

Mistake, in law, is a horrible thing. The principal of caveat emptor (let the buyer beware) may sometimes be upheld by the courts in these circumstances.

Were the parties ad idem (of like mind) in concluding the transaction? Was the seller, the buyer, or both mistaken? Unfortunately, it most often requires a court case to unravel the answers to these questions. Think about it like this: did the bank concerned wrongfully induce the buyer into purchasing the incorrect property? Alternatively, should the buyer have checked, double-checked and rechecked the Deed of Sale (with the benefit of an attorney) before signing it. And therein lies the rub. It will require a legal mind to cut the Gordian knot and that probably means litigation.

Stop and consider for a moment: the purported buyer has just committed to a purchase price and has just spent R200 000 on renovations. Unless they are heirs to a fortune, all indications are they are already financially extended, if not over-extended, in the pursuit of their dream home. How could they possibly engage in effective litigation with a financial giant after that?

Absa, it seems, is sticking to its guns and defending the claim saying that the property was, without its knowledge, incorrectly described as being situated in Loftus Street. However it states that the title deed description of the erf that appeared in the advertisement was for the Wagtail Place Property. This says the bank, was a bona fida mistake of which both parties were unaware at the time of signing the contract. In the bank’s view, the couple bought the Wagtail Place property.

Answers to the problem are not readily available, but the lesson to be learnt is this: never sign a contract of sale unless you are absolutely sure that it describes the property that you believe you are buying.

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