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What happens if you inadvertantly or intentionally buy property which is not proclaimed, not subdivided, not saleable on sectional title or for any reason cannot be registered in your name by the time your Deed of Sale says you must take transfer?
By arlene | February 25, 2009
It is illegal to sell land on instalments (that is, property which is paid for in more than two payments over a period exceeding a year) without the explicit specification by the seller in the contract or Deed of Sale of the date or event after which the seller will give transfer to the purchaser. This date or event cannot be later than five years from the signature of the contract. In other words the seller must give you transfer within five years and it is up to him to see that land is proclaimed, a sectional title register opened or any other necessary conditions are complied with within that time and the property is ready to be transferred into your name. If he does not fulfil his commitments in this regard, the purchaser has the right to cancel the contract and be reimbursed all the money he has paid. Not only does the seller forfeit any payments made to him towards the purchase price but he is charged interest as well.
What happens if the seller does not own the property or if he owes more on it than the price you are paying for it?
The sale of land by an intermediary (that is, someone who contracted to purchase from the registered owner but who has not yet taken transfer) is quite legal. You then become what is described as a ‘remote purchaser‘. But the law now provides you with considerable protection against unscrupulous users of this method of speculating in property. Here are two examples:
Anyone who sells land on instalments must, within 30 days of signing the contract, provide the purchaser with certificates declaring the amount required by every mortgagee for the discharge on all bonds on the property. In other words, if you buy a property for, say R40 000, which has a first bond on it from a building society of R30 000 and a second bond of R5 000, the seller is obliged by law to tell you and this means a debt of R35 000 has to be discharged before you can take transfer. Obviously, this can be done if you raise a bond by your transfer date.
B. If you find the owner owes more on the property than you have agreed to pay for it, you may cancel the contract within 14 days.
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Topics: Contract, Land, Property, Sale | 4 Comments »
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