From the beginning, I made it clear to my agent that I need to occupy as soon as possible, I have to move where I’m currently renting. The agent told me that they would talk to the sellers and it should not be a problem.

However, Barnard says she did not receive a copy of the contract after it was signed, with no clear communication about being able to take occupation from 1 July, as requested.

Covid-19 Lockdown has caused a number of issues for the industry that was put on hold for two months, further compounded by the deeds office being closed and many people now at risk of losing their jobs or being in financial distress as a result.  

Barnard says after her home loan was approved she contacted the agent to inquire about the occupation, as she was still not clear on the matter.

The agent sent me a voice note stating that it is fine and she is 100% sure that the contract states that we can move on the 1st of July. I sent a confirmation message wherein I told her I am giving notice then.

However, 3 days later she received feedback from her transferring Attorneys that says we can only occupy 1 August.

Barnard now wants to know if she can withdraw her purchase, as the registration is not done – based on the “lack of communication and facts she says were withheld from her?

And if I do what will the cost implications be due to this?

An offer to purchase, commonly referred to as the “OTP” is an important document which should not be entered into lightly without due regard to its contents. Once signed by both parties, it is a legal contract binding both seller and purchaser to fulfil their respective duties.

It is more often than not that the OTP would be subject to the relevant suspensive conditions.


Subject to suspensive conditions of bond approval

For clarities sake, a suspensive condition suspends the obligations flowing from a contract until the occurrence of an uncertain future event. As an example, the obligations flowing from an OTP could be subject to the purchaser obtaining bond approval. Once the purchaser obtains the approval, the contract comes into operation and would be binding on the parties. Importantly, the agent would also have earned their right to commission which would become due on date of transfer.

In light of the above, it is of the utmost importance for the purchaser to familiarise himself/herself with the terms and conditions of the OTP. Due consideration must be given to aspects such as date of occupation, occupational rent, improvements made and general conditions of sale. Once signed and provided the suspensive condition(s) are fulfilled, the purchaser is bound to that agreement.

'In breach, without any underlying legal cause'

Should any party fail to adhere to the terms of the OTP without an underlying legal cause, that party will stand in breach of the contract. The other party would thus be entitled to cancellation, to claim damages or to claim for specific performance. Additionally, the party who stands in breach could also be held liable for the agent’s commission where the relevant suspensive conditions have been fulfilled.

In this instance, it seems that the agreement was subject to bond approval which was subsequently obtained. The purchaser would thus stand in breach should he/she cancel the agreement unless he/she has an underlying legal cause. Which brings us to the relevant discussion below.

Within our law of contract, a party who signs a document containing contractual terms is generally bound by his/her signature whether he/she read the document or not.

'Grounds of misrepresentation' 

However, this rule is not absolute. The law also recognises that it would be unconscionable for a person to enforce the terms of a document where he/she misled the signatory, whether intentionally or not. Furthermore, in terms of industry specific regulations, an estate agent should not wilfully or negligently make any false statements or misrepresentations or willingly mislead and influence a prospective purchaser.

With that being said, in this scenario the agent made false statements to the purchaser regarding the date of occupation and thus made a misrepresentation which had the purchaser being aware of, would not have entered into the contract. The purchaser would have a legal ground to cancel making the agreement voidable at the purchaser’s election. If the purchaser cancels the agreement, he/she should be placed in the same position as prior to the conclusion of the offer to purchase.

Even though the misrepresentation was made by the estate agent it was done within the scope of his/her mandate authorised by the seller. The seller therefore in return would have a claim against the estate agent for any damages suffered as a result of the cancellation of the agreement.

Courtesy of Property24 

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