Think Carefully Before you Sign Any Agreement

Private Property South Africa
Lea Jacobs

The importance of thoroughly reading a contract before you sign it can never be over emphasised. In a case recently highlighted in the Cape Argus, a woman unwittingly signed ownership of her home over to an unknown party when she took out a loan for R250 000 on her property, which had been valued at R750 000.

This only became apparent when it was decided that her son would take out a bond on the property in order to repay the balance of the loan that the woman had been paying off at R4 000 per month. At this point it was discovered that the home was no longer hers and was in fact registered to a businessman called John Morley, a man she said she had never met.

The latest alleged incident comes hot on the heels of another case where the Western Cape High Court ruled in favour of a Bellville woman who was swindled out of her home by the same company. The Weekend Argus had previously reported that Bellville pensioner, Engela Lambrechts would be getting her home back after the company, Property Rescue, sold it without her knowledge while she thought it was being used as security for a loan requested by her son.

It was revealed during the Lambrechts court case that there are approximately 20 similar transactions in which Property Rescue is thought to be involved.

The above cases clearly show that no one should ever sign a contract (or any other document for that matter) without fully understanding the contents. In the past, legal jargon often confused South African consumers; the Consumer Protection Act (CPA) however has rectified this.

One of the objectives of the CPA is to ensure that the consumer understands the contents of all the documentation required for the buying and selling of property. In other words, the mandate, sales agreement and any other documentation has to be written in such a way that the average man with an average intelligence can fully understand the wording.

We are all human and as such generally don't enjoy appearing stupid. Scamsters often take advantage of this and will muddy the waters to such an extent that Einstein himself would struggle to make head or tail of what was actually being said.

Anyone who finds themselves in the position of not understanding exactly what is laid out in a contract should consult with their own attorney to clarify matters. They should never allow themselves to be pressurised into signing something that they do not understand and in fact, should question why a third party is trying to force them into something they may well regret at a later stage.

Trying to resolve an issue in a High Court costs a great deal of money. Unfortunately, because so much money is usually at stake when property transactions take place, aggrieved parties generally have no other option but to pursue this costly course of action.

Looking to sell your home?
Advertise your property to millions of interested buyers by listing with Private Property now!
Find out more


Found this content useful?

Get the best of Private Property's latest news and advice delivered straight to your inbox each week

Related Articles

Avoid these pitfalls when buying rental property
While investing in rental property can offer excellent rental returns, there are some pitfalls that you should be aware of.
Not maintaining your home makes it harder to sell
In these tough economic times, it is tempting to overlook home maintenance, but this could cost you a sale when you put your home on the market.
Could Atlantic Seaboard rentals hit R200 000 p/m soon?
Considering that Zimbali (KZN, Dolphin Coast) has hit R100 000/month and the Atlantic Seaboard is already at around R170 000/month, then the R200 000/month mark does not seem too farfetched.
Home security tips for homeowners and landlords
Security is a top priority for most home buyers as well as prospective tenants. So, what should sellers and landlords be doing to make their properties more appealing?