Demystifying agreements for the sale of immoveable property

Demystifying agreements for the sale of immoveable property

Demystifying agreements for the sale of immoveable property

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At first glance, an agreement for the sale of immoveable property may seem complicated. However, once explained they are relatively straightforward and logical.

Agreement of sale

By law, contracts involving the sale of immoveable property must be in writing and signed to be enforceable. The agreement, particularly if you should sign an agreement as supplied by an estate agent, may be termed an “offer to purchase”. It cannot be emphasised enough that as these agreements contain huge commitments, you must read through the agreement thoroughly and ensure that you understand each clause. If you are unhappy with a clause or even a word in a pre-printed agreement, it is open to you to amend it and initial next to the amendment. Do not allow yourself to be bullied or talked into signing something that you are unsure you will be able to commit to or you don’t fully understand. Taking the agreement to an attorney or property specialist is a good idea too.

Parties to the agreement

The parties may be individuals, companies, close corporations or trusts. If a party purchasing immoveable property is married in community of property, his or her spouse must sign as well. A property can be purchased by co-owners but can only be owned in undivided shares.

Mortgage bonds

Should the buyer require a bond to purchase the property, the agreement must state that the offer is subject to a bond being approved. The amount of the bond sought must be set out. A realistic time frame to obtain the bond must be specified, failing which a seller could wait for years while the buyer shops around for a favourable bond. Once the bond is granted, the buyer should notify the conveyancer and estate agent as soon as possible to enable the sale to proceed.

Subject to the sale of the buyer’s property

A common clause found in contracts is that the sale is subject to the sale of the buyer’s current property. This is done to free up capital or to avoid the situation where the buyer ends up owning two properties. The agreement should set out a description of the buyer’s property and, once again, the date it must be sold by.

“72 hour” clauses

Obviously, sellers are not very keen on sales that are dependent on the sale of other properties as they could miss out on a straightforward sale to another buyer in the interim. What is commonly termed a “72 hour clause” can be included in the sale agreement. This allows the seller to continue looking for another buyer. Should the seller receive another offer, the buyer is given 72 hours to fulfil the conditions on the original agreement, failing which original agreement falls away. It is open to the parties to stipulate a period of more or less than 72 hours, if they wish.

Occupation of the property by the buyer

This can be the date of transfer of the property into the buyer’s name or a specified date prior to transfer . If the date is before transfer, the buyer will pay occupational rental from that date. The agreement should set out the amount and details of payment.

Voetstoots clause

Most agreements will state that the property is sold voetstoots  or as it stands. This means that the seller does not give any guarantee regarding faults to the property. This clause protects a seller for an obvious (patent) defect in the property. If a seller knows about a defect that is not obvious (a latent defect) and does not disclose this, the seller is not protected by the voetstoots clause. If the seller is not aware of a defect when the property is sold, the voetstoots clause will protect the seller. This protection to a seller is not afforded to sales falling under the Consumer Protection Act where, for example, the seller is in the business of selling houses, such as a developer.

Electrical compliance certificates

An electrical compliance certificate is required by law before transfer can take place. Thus the seller must obtain a certified electrician to inspect the electrical installations if the certificate in the seller’s possession is older than two years or if any changes had been made to the electrical installations during this time.

Special conditions

Any special condition which either the buyer or seller has inserted into the agreement must be carefully studied.
A seller may want to remove an article that would normally be considered as part of the immoveable property such as kitchen cupboards. The seller must ensure that the excluded articles are described and listed in the contract. Likewise, if the buyer wants the offer to include specific items that would normally be characterised as moveable, such as curtains, items of furniture or pool cleaning equipment, these must be set out and described. Taking photographs is also a good idea.


A fair amount of litigation is generated around contracts for the sale of immoveable property and it is wise to ensure that a number of points are adhered to. Firstly, negotiate in good faith. Secondly, be honest with yourself regarding your needs and your financial capacity and, thirdly, ensure that you understand everything you sign. This should not, however, detract from your desire to own your own home but merely enable the transaction to proceed smoothly with the minimum of stress.