How to rescue an endangered sale
Category News
It is unusual for a property deal to fall through, especially if the buyers have made a sound assessment of what they need and can afford and have also worked closely with an experienced and qualified estate agent.
But unforeseen changes to personal circumstances can happen. People get retrenched every day. People get sick and need their money for urgent medical care. Latent defects do come to light sometimes before the registration of transfer. So it's vital to understand what to do in such instances, and what the potential ramifications are.
Of course, the "cooling-off" clause in the Alienation of Land Act, which covers residential property priced at under R250 000, gives buyers who have changed their minds about the purchase the chance to withdraw from the contract within five working days of signing the offer to purchase, without any penalty provided the seller is informed of their decision.
In the case of more expensive properties, an Offer to Purchase is a binding legal contract once accepted by the property seller, so a "change of mind" is simply not a good enough reason to refuse to go ahead with the transaction, and will usually entitle the seller to demand 'roukoop' - a penalty equal to a portion of the purchase price - from the defaulting buyer.
However, buyers whose family, work, or financial circumstances have genuinely changed suddenly might encounter understanding and even sympathy from a seller, if they are quick to communicate the change and give the seller's agent time to re-open negotiations with other potential buyers who expressed interest in the property.
On the other hand, if a latent defect is discovered before transfer - perhaps by a buyer who has taken early occupation of the property - the buyer may be willing to give the seller some leeway to renegotiate the price of the property or to reach an agreement on payment for repairs. And in such instances, the help of a seasoned and patient agent can be invaluable in helping the parties to reach an amicable solution and avoid protracted and expensive litigation.
Author: Chas Everitt