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Important Clauses in an Offer to Purchase Document

Beware before you sign contract or document.
As buying property will probably be one of the most important documents you will sign in your life it is best to have an Attorney draft or review the Offer to Purchase.
The moment the offer to purchase are signed by both parties it becomes a binding contract wherein the parties obtain certain rights and obligations. You will sometimes hear the phrase buyer remorse or the Latin Phrases Caveat emptor or caveat scriptor. Never be pressured to sign a contract you have not carefully scrutinised. It is not uncommon for an agent or seller to use a closing technique by pressurising the Purchaser with a statement that the purchaser must immediately sign because there are other parties also making an offer on the property at that very moment.

• Always make sure that all representations regarding the property are made part of the purchase agreement
• If not possible to incorporate in the offer to purchase independently verify the verbal facts as related.
• Asses the actual market value of the property and of properties in the area. Municipal value of the property.
• Approved building plans of the property. Coverage/Zoning
• Check on the availability of amenities, Schools in the area.
• Check the crime statistics of the area.
• Obtain a copy of the current Title Deed of the property.
• Sectional Title/Security estate/Home Owners Association. Check rules, levies and costs.
• Electrical and Beetle certificate.
• Look at stipulated times for acquiring Finance and the issuing of Guarantees.
• Deposit-Pay the deposit in the account of the transferring attorney.

• The identities of the parties must be ascertainable.
• The seller need not be the owner; he may not yet have taken transfer of the property, but may be allowed to resell it. This must however be disclosed in the contract, as well as who the owner is, and that transfer of the property cannot be passed to the purchaser before the seller has obtained transfer himself.
• If a party does not have the contractual capacity to conclude a contract, his name must still be cited, together with the identity of the person assisting him (i.e. the guardian of a minor).
• If a contract is entered into on behalf of a company or close corporation (cc), the name of the company or cc must be cited, together with the name of the person authorised to conclude the contract.
• If a contract is entered into on behalf of a partnership, the names of the partners must be cited.
• It is always a good idea to include contact numbers, i.e. Tel, Fax, Cell & Email.

Sale and Purchase of What?
When you buy a house, you in fact buy the land on which the house is situated. The house, being a permanent improvement, forms part of the land. All surface and subsurface soil, water, trees and plants on the land are by law included in the purchase. Also included are all the permanent improvements (like a house or other buildings, a borehole or a swimming pool) and all movable items, which have been permanently affixed to a house or other buildings (called permanent fixtures).
All movable accessories which are of permanent service to the immovable property and which are necessary for its effective use of exploitation are also included in the purchase of the property, unless agreed otherwise (Examples are the pool cleaning equipment or stools which go with the built-in breakfast nook.)
It is not a legal rule that certain items like stoves, carpets, light fittings, built-on cupboards, and so on, are permanent fixtures.
To avoid dispute, always specify and describe in writing on the offer to purchase document which items are included and which items are excluded in the purchase/sale, especially if you are not clear whether they are permanent improvements or movable fixtures. For example, whether the swimming pool equipment or television aerial/satellite dish are included in the purchase.

Purchase Price and Guarantees
The purchase price must either be a fixed amount (i.e. R100 000.00) or be readily ascertainable (i.e. R100.00 per square meter, including the correct size of the property).
Unless agreed otherwise, the purchase price is payable in a lump sum on transfer of the property to the buyer.
The guarantees referred to in the offer to purchase examples mean that the purchaser furnishes the seller with a promise from a bank that the price will be paid in full once the property is registered in the name of the purchaser (the purchaser will then pay off this 'mortgage bond' to the bank).

• A patent defect is clearly visible upon inspection, like a crack in a wall or window, and it should be stated in the offer to purchase who will be responsible for fixing (or replacing) the defect.
• A latent defect is not so easily picked up on superficial inspection, for example a faulty geyser, a damp area concealed behind furniture or fresh paint or a leaking roof.

Estate Agents' Commission
The Seller will be liable for the payment of any estate agents' commission (if applicable) on demand by the conveyancing attorney, once the registration and transfer has taken place.

Occupation and Occupational Interest
Occupational Interest is more commonly known as Occupational Rent.
The occupational interest can either be a fixed amount (usually it is calculated as either the amount of the seller's bond repayment on the property or 1% of the purchase price) or an amount subject to an escalation if registration of transfer has not taken place within a certain period (this may apply when the occupational interest amount is less than the seller's bond repayments). If there is uncertainty about the occupation date, it is best to record in writing the latest date upon which the purchaser is willing to take occupation of the property.
Domicilia Citandi Et Executandi
Domicilia Citandi Et Executandi, also referred to as Domicilium, is the physical address you give for any legal documents and notices to be served to you. If you have been sent a document or notice to this address, you will be deemed to have received it, even if you did not in fact receive it. This may not be a PO Box or Private Bag address.

• The property is intended to be used for anything other than a residential property;
• It is agricultural land;
• The purchase price of the property exceeds R 250 000.00 (i.e. from R 250 001.00 and more);
• The purchaser is not a natural person (i.e. a trust, company, close corporation, etc.);
• The property is purchased at a publicly advertised auction;
• The seller and purchaser concerned have previously entered into a sale agreement of the property on substantially the same terms;
• The purchaser has nominated or appointed another person to take over his rights and obligations in terms of the offer or sale agreement in question;
• The purchaser bought the property by the exercise of an option which was open for a period of at least five working days.
• An agreement is null and void if there is no Cooling Off Right in the agreement, providing that all the above mentioned points do not apply.
• No person will be entitled to any remuneration payable if the purchaser exercises his Cooling Off Right. The buyer cannot waive (give up) his Cooling Off Right.

Breach of Contract

A breach of contract exists when one or all of the parties to the contract to not do what was agreed upon in the offer to purchase. Examples of circumstances are:
If the buyer does not pay his deposit to the seller's attorneys in time as agreed upon in the offer to purchase;
If the buyer does not present the necessary guarantees from his bank in time as agreed upon;
If the buyer does not make any effort to get finance for the property, and this was agreed upon in the offer to purchase, to do so;
If either the buyer or seller fails to sign the necessary documents for purposes of transfer.