The Law

“Offer to purchase” contract

A contract or an offer to purchase is in essence an agreement to sell something at a price, subject to certain conditions. In our law everything that you agree upon relating to fixed property must be documented on paper.

A verbal agreement is not enough. All the terms of the agreement must be on paper (on the contract).

The property industry often refers to a contract as an “offer to purchase”. Always keep in mind that an accepted and signed offer to purchase is the legal binding contract.

The registration papers (Transfer and Bond documents) that will be completed and signed with the appointed Attorney are not the contract. Therefore it is crucial for the buyer and seller to ensure that the contract / offer to purchase is accurately completed and contains everything agreed upon!

The contract is critical – If you are unsure contact us!

Buying with a bond

If you finance the house with a home loan, remember that it needs to be approved first and then signed at the Attorneys. As such the date of the granting of the bond and date of delivery of the guarantees can not be the same date. Guarantees will only follow the granting of the bond.

With cash

If the buyer buys “cash”, guarantees usually imply Bank guarantees against cash in the bank or the deposit of funds into the transferring Attorney’s trust account.

Important pointers

  • Read the contract – the whole contract!
  • If something doesn’t make sense ask questions until you have clarity. Remember – if something doesn’t make sense it’s probably wrong!
  • Ensure that the following items are properly stated:

– The price

– The parties involved

– The correct property description

– The method of payment (Is the buyer applying for a bond or is the purchase subject to the sale of another property? Are these conditions stated as “suspensive conditions” which entails that the contract will automatically lapse should these conditions not be met timeously.)

– What stays and what goes? Are there specific fixtures the seller wants to remove? / Are there loose items the buyer feels should remain?

– Occupation date: Is it a specific date or the date of registration? What is the occupational rent amount?

– Electrical certificate: Most standard contracts state that the seller must supply an electrical certificate, gas certificate and electrical fence certificate. If you are the seller you must keep in mind that if your electrical installation is not in order, the electrician will not issue a certificate if the problem is not rectified.

– Specific dates: 1) How long does the buyer have to attain a bond? 2) How long does the buyer have to deliver guarantees?

– Any other terms specifically agreed upon?