Covid Casualties – The Importance of a Solid Agreement of Sale
Deeds office delays are commonplace in 2020 and the demand is not expected to ease as the property market begins to revive. The registrar continues to battle to expedite the transfer of property ownership due to the backlog created as a result of the impact of Covid-19.
The result is that many would-be homeowners are now faced with a very different financial situation than at the time of signing away for their dream house. Covid-19 has brought job losses, salary cuts and a general lack of earning, leaving many people under serious financial stress and now, a few months down the line, unable to negotiate their financial situation. PJ Veldhuizen of legal firm Gillan and Veldhuizen says that his firm has already been forced to turn away helpless clients who are requesting legal advice on property or mortgage transactions. “Now more than ever we are seeing the impact of not having a watertight contract in place.”
Veldhuizen says he is often left aghast at the ‘cut and paste’ type property deals he sees passing his desk. “The problem is that many offers to purchase have either been over-edited or are simply not comprehensive,” he warns. “Many do not go further than the mere approval of the bond as a clause. For instance, they don’t require the actual bond to be ultimately registered in order to fulfil the suspensive condition, i.e. the approval of the mortgage. Buyers may find themselves in the scenario where either the agent or the seller wishes to hold them to the sale or for damages or, in the case of the agent, to the payment of the commission.”
All of this could be avoided by simply letting your lawyer having a read-through prior to signature. “I am continually amazed at people who sign agreements for millions of rand in property purchases without consulting a lawyer, whereas if they were selling a business for a few hundred thousand they would sensibly consult a lawyer to draft the sale of business/shares agreement.”
“Penny wise, pound foolish,” he concludes.