When the sale of a home is subject to conditions, be careful!
Category Advice
When the sale of a home is subject to conditions, be careful!
One of the many aspects of property law that the typical South African property seller often does not understand is that when a seller accepts an offer on his home which is conditional on the sale of another property or some other factor, e.g. a divorce or an inheritance settlement, he automatically inherits all the conditions of that other arrangement. If, then, the sale of the other property or the other financial arrangements are cancelled, the sale of the first property will inevitably be held up.
Discussing this recently with a buyer whose sale had been delayed, Rowan Alexander, Director of Alexander Swart Property, said that experience of this type of situation has taught him that the seller (and his agent) must scrutinise the conditional buyer's other sale agreement or legal documents very closely and should then specify their own conditions - in particular they should set a time limit after which the buyer's offer on the first property becomes invalid. In most cases, he said, this limit should be not more than three months but provision can be made for an extension if it seems likely that the sale will soon go through.
Delays in sales, said Alexander, can be extremely inconvenient, e.g. if the original seller is about to be transferred to another territory or if he is hoping to buy another home now on the market.
"I estimate that some 90% of all home sales do have conditions attached to them, in most cases the fairly simple proviso that a bond must be granted, but where these more complicated arrangements come into force, in our experience certain of the conditions are often not met within a satisfactory time period. Sellers have, therefore, to be warned that, these delays hold-ups always being possible on a conditional sale, they should ensure that such conditions apply only for a limited time. Not to do this is to invite chaos and endless, frustrating delays into the property transaction."
In a recent case, said Alexander, the buyer hoped to sell his existing property within three months but made his offer for his new home conditional on his registering the sale of his current property in six months time. The seller was advised by Alexander Swart that this was too long a period to wait: the would-be buyer was informed that "a great deal can happen in six months and so long a delay cannot be accepted."
Author: Independent Author
