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IT IS WISE TO TAKE THE ADVICE OF BOTH AGENTS AND CONVEYANCERS TO ENSURE THAT A PROPERTY TRANSACTION DOES NOT GO WRONG
There has always been a tendency among South Africans, especially those who have achieved success in the business world to believe that they are capable of handling property transactions on their own. They are inclined to think that a perusal of the business media and talks to friends have somehow qualified them as experts in property matters. All too often, says Anton du Plessis, this is not the case and this attitude leads to serious mistakes.
“When I advise clients that they must be guided by an estate agent, there will always be a few who believe that I am saying this to protect my position. This scepticism is, however, not justified. Many incidents have in my career shown that the average SA citizen needs guidance in his property deals.”
Clients coming to property from other fields, said du Plessis, almost invariably lack the knowledge of property law and property finance (and the nuances and conditions surrounding these matters) of which an experienced agent will be aware.
What should the client do, however, if he has doubts about the agent’s competence?
“In the case of a seller, it is prudent to send all written documentation (including all offers made for the house) to an attorney, preferably the one chosen to act as the conveyancer on the deal. The conveyancer will usually welcome this, as it is far easier to adjust an offer before the seller signs than to spend valuable time sorting out a dispute arising out of a faulty contract.”
In most cases, said du Plessis, buyers have recently sold or are selling their homes, and should already have a relationship with their conveyancer who can then be asked to check the new deal.
“Only rarely is an offer so urgent that it cannot be vetted by a conveyancer. Most conveyancers will make themselves or a partner available at short notice if required to do so.”
Should an offer go through without being checked by an attorney, the bidder will have to accept that it may be very difficult to alter the offer’s conditions after it has been submitted – and even more difficult after it has been accepted.
“Similarly, the seller, once he has accepted an offer, is at the mercy of the buyer, who may or may not allow changes.”
What are the factors in property documentation that can lead to problems?
Du Plessis said that a lack of accuracy or definition, vagueness and ambiguity are the main reason for contracts becoming “voidable”.
“I have recently seen a deed of sale where transfer was listed as 1 March 2011, and the buyer had until 29 February 2011 to sell his house. Clearly, no attorney in his right mind would initiate the transfer process until the suspensive condition of the buyer’s sale has been concluded. While this would not necessarily cause the sale to be cancelled, it clearly created a false expectation in the seller’s mind. In 2010 there was a R10 million sale on which the buyer reneged, but got away with it because the agent had not written the seller’s first names and surname on the deed of sale. (The parties to the agreement must be clearly identified.) Even the best agents may occasionally make a typographical error – although this is generally not grounds to cancel a sale if it is obvious that it was an error. For example, if an erf number is written incorrectly, as long as there is no confusion as to which property the buyer is making an offer on, it should not pose a problem. It would however be problematic where one is buying a vacant erf in a large development.
“I have also seen clauses which lack completeness: for example, the seller might agree to have the roof inspected by an expert but does not say who will be responsible for repairs if the expert finds faults.” (Du Plessis has his own “formula” for this situation and usually alters agreements in line with it.)
Errors or omissions, said du Plessis, lead to frustration, anxiety, delays – and quite often to the cancellation of the deal and in most cases they would have been completely avoidable if the error or omission had been picked up before the agreement was accepted..
But, he warns, sellers or buyers should not allow a pedantic attorney to insist on minor alterations in what is otherwise an excellent offer to purchase.
“When presented with a clean cash, binding offer, it is unwise to alter an agreement over a relatively small item – e.g. a second hand fridge. If one does, your alteration becomes a counteroffer to the buyer and if he does not accept the change, the deal can be terminated. There are many occasions where a buyer makes a clean offer, but when the excitement of making the offer dies down, he gets ‘ buyer’s remorse’. This often happens quite often but the sale goes through because the buyer is contractually bound. However, if he is given an opportunity to rethink, it is possible that he will change his mind.
“The involvement of a good agent should be a safeguard against pitfalls of this kind – so check your agent’s reputation with the Institute of Estate Agents and if he or she is not a member, or is a member with disciplinary hearings pending, treat that as grounds for caution.”