Please note that since this book was last published in 1997 some of the laws that have been referenced may have changed. We
are doing our best to update the articles, however, it is advisable that you to consult an attorney before relying on any information contained herein.
The sale or purchase of immoveable property becomes a legal
transaction only after the buyer and the seller (or their agents)
sign a document known as a deed (or agreement) of sale.
In terms of the Alienation of Land Act, 1981, a deed of sale
must be in writing for it to be binding.
Until the signatures of both the buyer and the seller (or
their agents) appear on the document, neither party will be bound
by its terms - irrespective of what they have agreed on orally.
Therefore, if the seller of a house has a change of mind about
the purchase price and you (as the prospective buyer) still wish
to acquire the property, you will have to make a new offer. If
the seller accepts this new offer, you will have to draw up a new
deed of sale or amend the old one.
What a deed of sale should contain
Don't sign a deed of sale unless you understand all its
clauses. The main clauses that you're likely to encounter are
explained here in the order in which they normally appear on the
Buyer, seller and property
The buyer, seller and property must be properly identified.
BUYER If you're the buyer, your full name and present address
must be supplied, together with your identity number and
telephone number (if these are required for the transaction).
SELLER The document must contain the full name and address of
the seller and identity number (if these are required for the
DESCRIPTION OF THE PROPERTY The property that is being sold
must be properly described to avoid any confusion. Any ambiguity
or uncertainty in the description could make the sale
unenforceable. If, for example, a property is referred to as Erf
No 343 in the district of Randburg and it turns out that there
are a number of townships in that district, each with an Erf No
343, the property would not have been identified with sufficient
accuracy. On the other hand, the courts do not insist on perfect
descriptions. Generally, they are satisfied if a reasonably
intelligent reader of the contract can identify the property from
its written description. In the case of residential property,
therefore, it is usually sufficient to give the street name, the
number and the suburb of the property. Other means of identifying
a property include:
- Giving the erf number and the township - for example, Erf
343 in Randburg Extension 10;
- Mentioning a building by its name - if it has one - for
example, Meredith Mews, or Poyntin Mansions; and
- Reference to its present owner - for example, the
property registered in the name of George Smith in the
Deeds Registry. Ensure, though, that George Smith does
not have more than one property registered in his name.
The purchase price
1. The purchase price shall be the sum of......... payable as
follows: (a) A deposit of R.....in cash payable
to..............(estate agent or attorney). (b) The balance to be
paid by the purchaser to the seller in cash upon registration of
transfer. Upon demand the purchaser shall furnish the seller with
a banker's guarantee (or any other guarantee approved of by the
The written contract must specify the price of the property
sold, or how the price can be determined, without requiring any
further or future agreement between you and the seller. If the
price is specifically mentioned, for example R190000, there is no
difficulty. But if the contract stipulates that the price will be
negotiated between you and the seller before transfer of the
property, there is no sale.
A determination of the price, for example, could be 'the price
contained in the seller's advertisement in the Farmer's Weekly of
26 October 1991' or '200 per cent of the municipal valuation
appearing on the municipal valuation roll'. Both of these are
Clauses relating to the method of payment must be clearly
understood. If nothing is said about the method of payment, the
law will rule that payment must be made in cash at the time of
transfer. However, most contracts have provisions outlining more
than one different method of payment, including:
THE DEPOSIT Usually 10 per cent of the total purchase price,
the deposit must be paid as soon as the seller accepts your offer
(or within seven days of making it). Normally, the seller
requires a deposit as an indication that you are serious about
acquiring the property. If satisfied that you really want the
property, the seller may dispense with the deposit altogether.
Alternatively, you may be asked for a more substantial proportion
of the purchase price before transfer if the seller is not
convinced about your good intentions.
To protect you against the possibility of the seller
absconding with your deposit, or even going insolvent, the money
will be held in trust by either an estate agent or an attorney
acting on behalf of the seller, until the sale has been confirmed
- for example, by the granting of a bond. If you are paying a
substantial deposit, try to get the seller to agree to invest it
with a bank (with both parties getting a share of the interest)
until the seller is entitled to the money. This arrangement will
suit the seller's estate agent, whose commission usually comes
out of the deposit paid by the buyer. An agent holding the entire
deposit in trust will probably deduct commission before passing
the balance to the seller.
Some sellers may insist on further reassurance that the buyer
will pay the balance of the purchase price on transfer. Usually,
a letter from a bank confirming the grant-ing of a loan will
satisfy the seller.
Depending on the circumstances, a seller may require an even
more formal reassurance - in the form of a guarantee by a bank or
other recognised financial institution - that funds are
THE BALANCE OF THE PURCHASE PRICE is normally written down as
being paid in cash when you take transfer of the property; - that
is, when the property is formally registered in your name in the
appropriate Deeds Registry.
This offer expires on.....................(date) and until
then is irrevocable by the purchaser.
This is the date by which the seller must decide whether or
not to accept your offer. The usual period allowed is 48 hours,
but could be as long as several weeks if, for example, it is
necessary to obtain acceptance from several co-owners. It should
be noted, however, that if the offer is irrevocable until the
expiry of the stated period, it is not wise to allow a long
period as you might, at the end of the period find that the
seller has not accepted your offer, and because the offer was
irrevocable, you have been unable to make an offer on another
property which you liked.
The sale is conditional upon a first mortgage bond of
R......................being granted in principle by a recognised
financial institution within................days from date of
acceptance of this offer. The purchaser hereby authorises
......................(estate agent) to apply for a loan on his
or her behalf on the terms, conditions and interest rate
prevalent at the time.
Before you enter into an agreement of sale, you should check
if your bank or recognised financial institution will grant you
the necessary funds for the purchase of the property. In most
cases, however, financial institutions will give no firm
assurances about the availability of funds until they have had
the chance to inspect the property - to see that it is of
sufficient value and that the money it will lend on security of a
bond over that property will be safe. (See mortgage bond.)
If, in these circumstances, you were to enter into an
agreement of sale in which you agreed to the unconditional
payment of the purchase price of the property against transfer,
you may seriously embarrass yourself financially. For, should you
be unable to raise the funds, the contract would remain binding
and the seller might sue you for the balance of the purchase
price against transfer.
To avoid this type of problem, most deeds of sale are made
conditional upon the purchaser being able to raise from a bank or
financial institution the funds to pay the seller the balance of
the price owing. If the bond is not granted, the sale falls
Provision is also sometimes made for the seller's estate agent
to attempt to raise the necessary money should the purchaser fail
to do so.
Transfer of the property shall be passed by the seller's
conveyancer and shall be given and taken upon the purchaser
having complied with his or her obligations due on .......
Agreement is often reached about the approximate time that
transfer of the property will be taken. It is impossible to
predict when transfer will be registered in the appropriate Deeds
Registry and you cannot expect the seller to agree that transfer
will be passed on a particular date. However, a clause is usually
inserted saying that the seller undertakes to pass transfer as
close as possible to a certain date.
Costs of transfer
The purchaser shall pay all transfer costs incurred in respect
of the transfer of the property, including transfer duty and the
costs of this deed of sale.
It is usual, but not a fixed rule, for the buyer to undertake
to pay the costs of transfer. This will include the attorney's
and conveyancer's fees, state transfer duty and all other costs
that are reasonably incurred in the passing of transfer. A scale
of conveyancers' fees are set out in the government gazette.
Occupation and possession Occupation and/or possession of the
property shall be given to the purchaser by the seller
on........(date) and if the purchaser takes occupation before
transfer the purchaser shall pay to the seller...........per cent
per annum on the balance of the purchase price outstanding or
occupational interest at the rate of R...... per month until
transfer is effected.
Generally, owners of immoveable property have the right to use
that property for their own purposes. (They may, of course, give
up the right to occupy it if, for instance, it is let to a
Ownership changes hands only once transfer is effected in the
Deeds Registry. Most deeds of sale make provision for
'occupational interest' - where you agree that, if you take
occupation before transfer, you will pay interest (usually the
same as that charged by banks) on the balance of the price still
owing to the seller.
It can also be written into the deed that if the seller
retains possession of the property after transfer, he or she
would have to pay occupational interest.
If no specific date is mentioned in the deed of sale, the
seller can continue to occupy the property until he or she has
received the balance of the selling price.
Rates and taxes
The purchaser shall be liable for a pro rata share of all
rates and taxes from date of occupation or possession.
This means that you will have to pay a proportional share of
the annual rates on the property, calculated from the day
stipulated in the agreement. If, for example, the local
authority's rates year commenced on July 1 and you took
occupation/possession in December, you would be liable for seven
months' rates to the end of the rates year, while the seller
would pay five months' rates.
It is agreed that the property shall be at the sole risk of
the purchaser from the date of possession.
Under common law, once the
agreement of sale is concluded, the risk of damage passes to you
even if the seller remains in occupation or possession of the
house. However, in the interests of fairness, most standard
agreements of sale stipulate that the risk only passes on
possession of the property.
Therefore, even if the house is damaged by, say, fire before
transfer but possession has passed to you, you will bear the
loss. In fact, the seller may force you to pay the full price
even if the house is in ruins. If, however, the damage is caused
by the seller's negligence, because he or she did not take proper
precautions to prevent the damage, the position is reversed. You
should, therefore, make sure the home is properly insured when
you become liable for 'sole risk'.
The property is sold voetstoots and as it stands, the seller
gives no warranty in regard to the buildings and any improvements
upon the property. The seller shall not be liable for any defects
in the property, either latent or patent.
Most property is sold as it stands, or voet-stoots. Under
common law the seller is not liable for latent defect in goods sold. If
you buy a house with obvious defects such as broken windows or
cracks in the walls which would have been revealed by a
reasonably careful inspection of the property, you will have no
claim against the seller.
With latent defect,
however, the position is different. If the house has defects such
as a leaking roof or termites in the wood that are not apparent
from a careful inspection, the seller is generally liable for
those defects. Depending on the defect, the seller may be called
upon to refund part of the purchase price or even cancel the
Because of the reluctance of sellers to have to make good such
defects or run the risk of having the sale cancelled, or having
to refund part of the purchase price should a serious latent
defect become apparent, it is usual in deeds of sale for the
seller to exclude his or her common-law liability to make good
such defects. This is usually done with the inclusion of a clause
stating that the house is sold voetstoots or 'as is'.
If, however, the seller is aware or should reasonably have
been aware of a latent defect - for example, if the roof of the
house had leaked in the last rains before the sale - the seller
may be liable even if a voet-stoots clause appears in the deed of
sale. The seller has a duty to reveal all latent defects of which
he or she is aware. However, for a claim against the seller to
succeed, you would have to prove that the seller was aware of the
latent defect and had intentionally failed to disclose it with
the purpose of defrauding you.
The property is sold as described in the existing title deeds
and is subject to all conditions, servitudes (if any) attaching
thereto or referred to in the said title deeds or prior deed. The
seller shall not be liable for any deficiency in extent which may
be revealed on any resurvey, nor shall the seller benefit by any
This clause is designed to protect the seller from any
discrepancy between what you (the buyer) believe is the size or
extent of the property and the real extent of the property.
However, because all banks or financial institutions check the
title deeds of the land before granting a bond, your bank should
make you aware of any discrepancy. (See servitudes.)
The seller shall pay the agent's commission at tariff rate or
as otherwise agreed from the initial payment to ...............
This clause is always included on a printed form presented by
an estate agent to ensure that the seller pays commission. The
amount is usually based on a tariff set out by the Institute of
Estate Agents of South Africa. (See commission, estate agent's.)
Fixtures and fittings
The property is sold inclusive of all existing fixtures and
fittings, which the seller warrants to be his or her property and
fully paid for. These, together with the following moveable
appurtenances, which are specifically included, are sold
Although the question of which fixtures and fittings
automatically go with a house when it is sold is a frequent cause
of disputes and misunderstandings, the law leaves it to the
purchaser and seller to make their own arrangements.
However, where no agreement is made, the law assumes that
certain items - such as electrical wiring and plumbing - are
handed over with the house, and that others - such as stoves and
refrigerators - are removed by the seller (except in Gauteng,
Northern Province, Mpumalanga and North-West Province, where
stoves are usually considered to be fixtures).
Unfortunately, there are a number of fixtures and fittings
about which the law is not clear. Mention them specifically when
you make your offer to purchase so that you know which items are
part of the property. These items should include hanging light
fittings, some electrical fittings that are plugged in, including
TV aerials and air conditioners, some gas, anthracite or electric
heaters, carpets and linoleum of all types, including fitted
carpets and venetian blinds.
PERMANENT FIXTURES Items that are usually regarded as
permanent fixtures include:
- Built-in extractor fans;
- Any part of the bathroom suite;
- Built-in kitchen units and cupboards;
- Wardrobes that have been 'purpose made' (buyers should
check when making an inspection of a house to buy that
cupboards are, in fact, built in);
- Fitted curtain rails and tracks designed to a particular
- Fitted bookshelves;
- Decorative wall mirrors;
- Built-in kitchen appliances, including built-in stoves;
- Structures in the garden with proper foundations. Always
make a list of doubtful fixtures when you inspect the
house and include them in the agreement of sale.
The seller agrees to produce an Electrical Certificate of
This means that the complete installation of the property
should be inspected by a reputable contractor registered with the
Electrical Contractors Association. The certificate is, according
to regulations, transferable, but buyers are advised to insist on
a new one if some time has passed since the original inspection
was made. Your estate agent may be able to assist in procuring
such an electrical contractor.
Beetle inspection certificate
The seller undertakes at own expense to arrange for all
accessible portions of the property to be inspected by a sapca
(South African Pest Control Association) registered inspector,
and, in the event of any infestation by wood-destroying
organisms, the seller shall replace such infested timbers with
pre-treated timber at his or her own cost before transfer.
This clause normally applies only to Western Cape, although
other insects may be treated under similar clauses in other areas
of the country, for example, inland termites may be a problem and
it would be advantageous to include a similar clause to cover
this type of infestation. Banks and financial institutions will,
in any case, usually make the granting of a bond conditional on
inspection and replacement of infested timber.
It is agreed by the parties that their respective addresses
set out shall be the addresses to which all notices or other
documents may be sent in relation to those present.
You will usually be asked to nominate an address as your domicilium citandi et executandi,
which simply means the place at which official notices in
connection with the sale can be delivered to you. If you should
fail to comply with any of the terms of the agreement, this is
the address at which you can be sued.
In the event of the purchaser failing to fulfil on due date
any of the terms and conditions of this deed of sale, the seller
or the seller's agent shall have the right either to: (a) Cancel
the sale by registered letter addressed to the purchaser, in
which event the purchaser shall forfeit all monies paid to the
seller or his or her agent, without prejudice to the seller's
other legal rights and remedies and the right to claim damages;
or (b) Claim immediate payment of the whole of the purchase price
and the fulfilment of all the terms and conditions hereof.
Should you fail to fulfil any of the conditions set out in the
deed of sale, the seller has the right to claim the immediate
payment of the whole of the purchase price or to cancel the sale
and retain any payment made in the form of a deposit. The seller
is further protected as far as any other legal right to sue you
is concerned, such as a further action for breach of contract.
In sub-clause (b) the seller can force you to pay the entire
purchase price, although, obviously, this would be impractical if
you did not have the money.
The buyer and seller can put practically any other clause into
their agreement - provided it is lawful.
Precisely which clauses go in will depend on their particular
circumstances at the time of the sale.
Signing the agreement of sale
The agreement must be signed by the parties to the agreement
or their agents acting on their written authority. All that is
required is a mark made by the person to identify the act of
entering into the contract as his or her own act.
You can sign by making a mark, or by signing your name in
full, or by using your initials. Your signature can be in ink,
pencil or even by means of a rubber stamp. The important point is
that you should intend that the mark on the paper should be your
You should sign at the end of the contract and initial each
page. It is also advisable to initial on the edge of the page
alongside any amendments, deletions or handwritten insertions.
This will identify the agreement and may prevent disputes at a
later stage. Sign with your usual signature - if it is illegible,
print your name below. This is not required by law, but it is
WITNESSES No witnesses are required to enter into a valid
contract for the sale of land. But if the signatures on the
contract are witnessed, disputes may be avoided should one of the
parties deny that a signature is his or hers. You could also ask
the witnesses to initial any clauses you have cancelled. The same
witness should also sign at the bottom of each page.
Buying by telegram and electronic means
It is possible to enter into a valid deed of sale by telegram
or electronic means such as telex or facsimile. If you make a
written offer to which the seller responds by telegraphing
acceptance, a valid sale will come into existence provided all
the essential terms are in the original offer and are in the
telegram. Beware, however, of phonograms.
A seller who goes to the post office to send a telegram will
fill in the telegram form and sign it at the end, thereby
complying with the requirement that a valid contract must be
signed by the seller.
Once this is done, the original offer together with the signed
copy of the telegram handed in to the post office constitute the
written contract bearing the signatures of both parties.
However, should the seller dispatch a phonogram to indicate
acceptance - that is, by simply telling the telegraph operator
over the telephone what message needs to be sent to you - there
will be no agreement bearing both signatures, and the sale will
therefore be considered void.
Take care, too, if you are contracting for the sale of land by
telegram, that you go to the post office yourself to dispatch the
telegram. If you send someone else, give your authorisation to
accept or to make an offer in writing. Alternatively, sign the
telegram form yourself at home.