Part of a regular feature on the in's and out's of property law. In this edition, we look at things options available for buyers who are unable to secure bond finance, specifically Instalment Sale Agreements and Rental with an Option to Purchase.
A common problem being experienced at the moment is that there is a ‘willing seller’ and a ‘willing buyer’, but the buyer is unable to obtain bond finance. It’s important to be able to conclude a sale, so there are various options that can be considered:
INSTALMENT SALE AGREEMENTS
This is a valid option, but there are a few golden rules:
Should the buyer fail to come up with the balance of the purchase price, he or she will have to move out and all payments made (deposit paid and monthly instalments) will be forfeited to the seller.
RENTAL WITH AN OPTION TO PURCHASE
In this scenario, the buyer concludes an option to purchase which he or she can exercise within a stipulated time period whilst they are renting the property. The golden rules:
In the event that the buyer elects not to exercise the option to purchase the property, he or she can simply move out when the lease period expires.
Property Law - In's and Out's
Private Property South Africa
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