Court ruling: Property sale nightmare
12 April 2010
Without a cut off date for bond approvals the seller cannot look for another buyer.
Surprisingly, it quite often happens that when estate agents draw up a deed of sale in which there are suspensive conditions, they omit to include a date by which these must be fulfilled.
In a recent high court case Reddy v Govender, this omission had a crucial effect on the final ruling.
The buyer, Govender, made the purchase of a R420 000 property subject to obtaining a bond from a financial institution. However, no date was stipulated as to by when this had to be achieved.
When after one month's wait the buyer still had no bond, the seller, Reddy, announced that that she was cancelling the agreement because a reasonable amount of time, in her opinion, had passed for the buyer to fulfil this condition - one month is a normal time in most deeds of sale for this.
The argument, therefore, in the end hinged on whether the four or five weeks that had lapsed was reasonable or sufficient time to raise such a bond.
In its decision the court referred to several cases including one in 1979 in which the judged had ruled that "this type of operation" can be time-consuming and that the appellant had not proved that the defendant had had enough time. Much the same argument, the court ruled, could be put forward in this case.
The judge also ruled that there was insufficient evidence that the appellant had kept the defendant informed of her need for speed and her intention to sell elsewhere if the conditions were not met on time.
The lesson to be learnt from this case is that not only should the contract stipulate a cut-off date by when all the suspensive conditions should be met, but, in addition, all subsequent attempts to communicate with the buyer by verbal or other means should have gone into the record. Apparently there had been several efforts of this kind but there was no proof of them. The buyer, was therefore given an extension of time to get a bond.
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