Let's face it - very few of us who buy property are fully aware of all of the legal in's and out's. Keep abreast of the latest decisions and other things you may need to know through our regular feature on property law. In this edition, we look at things that need to be in place when purchasing property in a trust, as well as your rights as a buyer when buying into a development where the developer has reserved the right to extend the scheme.
The sale or purchase of a property in a trust will only be valid if:
If these conditions are not in place, the agreement of sale is void from the outset and cannot be ratified at a later stage.
A trustee who was not party to the decision making process and who therefore has not authorised the contract would be free to contest the validity of the transaction but must do so before transfer takes place. This was again confirmed in the matter of Thorpe v Trittenwein (2006) SCA.
It speaks for itself that an agreement cannot be concluded on behalf of a trust that is not in existence at the time of the sale, either.
Sectional Title Act Section 25 – Right to Extend a Scheme
In many developments, the developer may have reserved to himself the right to extend the scheme by, for example, building more units or adding on more floors to a block of flats. This extension will take place on the existing common property.
There is an obligation on sellers to disclose this right to future buyers of units in a development. If this is not disclosed in a sale agreement, the sale can be set aside, and declared null and void, or the buyer can claim damages against the seller.
It is advisable that agents familiarise themselves with the sectional title plans of developments where they do re-sales of units to ensure that this is disclosed in all future sale agreements.
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