When you sell your house, don’t use the estate agent’s standard sale agreement

In light of the continuing increase in values of immovable property in recent times it is prudent to have an attorney draft the sale agreement after consulting the parties.

Get your attorney’s help
In terms of the Alienation of Land Act, any sale of immovable property must be contained in a written sale agreement.  This sale agreement constitutes the basis upon which a person disposes of a very important asset, often the person’s only asset of real value.  Invariably, the seller leaves the drafting of the sale agreement to the estate agent, who uses a standard preprinted document which he or she amends by crossing out those paragraphs which are not applicable, and inserting others by hand.

This is not a good idea as estate agents are not legally trained and it is possible that one or more important aspects of the sale will not dealt with adequately.  It is far more prudent to have an attorney draft the sale agreement after consulting the parties.

Read the contract
It also happens far too often that the parties to the sale agreement do not read it before they sign it.  It goes without saying that this is extremely foolish as in South African law a party is deemed to have read and understood the contents of a document which he has signed. He cannot rely on what the estate agent may have said is contained in the contract.

Check the title deed first

A further issue of concern is that almost all purchasers are prepared to sign the sale agreement and purchase an immovable property without first obtaining and checking the title deed of that property. The title deed of a property is a public document and can be obtained from the deeds office for the relevant area.

The title deed will indicate whether the seller is, in fact, the owner of the property, the size of the immovable property and, most importantly, will tell the purchaser what conditions or servitudes may be registered against the immovable property.  A very simple condition which may be extremely relevant for the purchaser may be a building restriction that provides, e.g., that a building structure may not be erected within 12 metres of the western boundary of the property.

If the purchaser only discovers the existence of this condition when the Local Council rejects his building plans to renovate his new house, he will have a problem and no doubt be very unhappy. The Purchaser will, however, have no recourse against the seller as any properly drafted sale agreement will expressly state that the purchaser has acquainted himself with the title deed and purchases the immovable property “voetstoots”.

The following are aspects which should be contained in every deed of sale in respect of the sale of immovable property:

1. The names of all of the parties;

2. A full description of the immovable property;

3. The purchase price;

4. The manner in which the purchase price is to be secured;

5. The date of occupation;

6. The occupational rental payable, if any;

7. The mechanism for resolving a breach of the agreement by either of the parties;

8. A voetstoots clause.

This list contains the essential elements of the written sale agreement. The contract will, however, contain a number of other clauses, aimed at making the transfer of the immovable property as smooth and hassle-free as possible.