When offering to purchase a property and when recording the sales agreement of a property it must be done in writing to be valid in South African law. There is a good reason for this.
There is much more to an offer than just the price that is offered. There are material terms to a contract that would well have a significant financial impact on the relevant parties. For example, which fixtures and fittings are included? What are the terms relating to the timing of the sale? When will occupation and possession be given, and when is the date of transfer?
There may also be agreement reached between the parties on obligations that each party has. In some instances an offer on a property may be conditional on the purchaser obtaining finance or selling another property. The payments terms are also agreed.
Sometimes there may be certain rectification work that a seller needs to carry out, including ensuring the electrical, plumbing, gas, and electric fence installation meets minimum government safety requirements.
If these terms are not recorded in writing then it becomes impossible to hold the parties to the agreement. Once a written offer is accepted by both parties it becomes a legal and binding agreement between all parties and they have an obligation, in law, to fulfill their obligations as recorded in writing.
For that reason it’s vitally important that you fully understand what you are signing, what your obligations are, and what the penalties are should you fail to do what is required of you. If you aren’t sure what a clause means then ask for a full explanation. If necessary, consult your attorney – but in most instances the agent will explain when you ask them.
The same applies when you sign a sole mandate with a real estate agency. In a sole mandate you commit to giving a real estate company exclusive rights to market and sell your property for a specific period of time. On what basis would you do this?
You should only consider this when you are happy with the marketing plan and service commitment of the agent – and these must be recorded on the sole mandate agreement. If their commitment is vague then you will find it difficult to hold them to it. So insist that the specific details are recorded on the mandate.
It’s also vitally important that the sole mandate include a clause that allows you to cancel the mandate agreement should the agency fail to fulfill their marketing and service undertaking and not rectify it when you notify them of their failure. If you don’t do this you could find yourself tied into a mandate with no performance criteria. Also be aware that you have rights under the Consumer Protection Act.
So, before you sign a legal contract be sure you understand what you are signing, and the full implications. When all parties fulfill their legal obligations this results in a successful and happy transaction – and that’s what you deserve.