What terms and conditions must appear in a sale agreement?
The terms and conditions that the seller and the buyer MUST agree on are:
- Identity of the seller and the buyer: by including their names, identity numbers, addresses and/or marital statuses.
- Description of the property being sold by the seller: by including the deeds office’s description, size, and/or street address of the property being sold.
- Purchase price of the property payable by the buyer: by including how the property is going to be paid by the buyer, for example, in cash or by obtaining a loan, and whether or not a deposit is payable. If a deposit is payable, the deposit must be held in an interest bearing trust account by the conveyancer (the attorney instructed to transfer the property). If the purchase price is R250 000 or less, a cooling-off period of five working days will apply.
The terms and conditions that the seller and the buyer MAY also agree on are, for example:
- Fixtures and fittings: anything else included in the sale of the property must be specified, for example, a tool-shed, curtains, remotes and so on.
- Conveyancer: details of the conveyancer handling the transfer. Usually the seller decides on a conveyancer, however, the seller and the buyer may also agree on a conveyancer.
- Costs: person responsible for certain costs relating to the transfer of the property, for example, obtaining a clearance certificate, transfer duty or value added tax and so on. The buyer and the seller are usually responsible for their own costs relating to obtaining, or cancelling of, a loan for the property.
- Occupation: the date of occupation by the buyer (on registration or a specified date before or after registration of the property into the buyer’s name) and the amount of occupational rent payable by the seller or the buyer, if any.
- Voetstoots: when a property is sold “as is” (current condition). The defects or possible defects must be disclosed to the buyer to avoid liability for damages.
- Estate agent: name of the estate agent and the amount of commission payable, if any. The commission is negotiable between the seller and the estate agent.
- Certificates: the seller must provide, at his/her costs, an electrical compliance certificate, electrical fence certificate, pest control certificate and/or a gas compliance certificate.
- Suspensive conditions: for example, whether the sale is subject to the buyer obtaining a loan within an agreed period of time. The sale cannot proceed until all the suspensive conditions have been met.
- Breach: what will happen if the seller or the buyer does not comply with the sale agreement, for example, if the buyer breaches the agreement of sale, the seller will notify the buyer to fix the breach within seven days. If the buyer does not fix the breach, the seller will be entitled to proceed with a claim for performance in court or cancel the sale agreement and proceed with a claim for damages in court.