PropertyLaw

The ownership of our own home is a dream which all of us have; but not all of us will realise; and when the opportunity to own your own home knocks; do your homework! Get advice and in that way you will not make any mistakes.
A recent unreported case of Hlabane and Another versus Sebotsa and Others is a lesson to be learned.

house buy image cardboard family
Although Estate Agents must almost always first act in the best interests of sellers, as they are usually the seller’s agents; and it is stated in the Estate Agency Affairs Boards code of conduct, it is also their moral and ethical duty to be mindful of the rights of buyer.

In this case of Hlabane, the buyers, the sellers and the agent agreed to transfer to the seller the full listed purchase price before registration of transfer took place in the Deeds Office. This was a serious mistake.

The facts briefly were as follows:
1. The deed of sale had already been signed. This document provided for immediate payment of the full purchase price to the seller.
2. The buyers were then accused of being in breach of the sale contract; but, in fact, the estate agent had held the full amount of the purchase price in trust on behalf of the seller and not paid it over as per the deed of sale.
3. The court later found in favour of the purchasers; ordering the transfer of the property; as they had never technically or legally been in breach of their obligations in terms of the deed of sale.
4. The Hlabanes, had signed an agreement of sale drawn up by an inexperienced agent; as the buyers of a property owned by Sebotsa in Bloemfontein in the Free State.
5. At the time of the deed of sale the seller, Sebotsa, was still waiting for the title deed from the municipality from whom he was to receive transfer of the property that he had bought from it; months earlier; once it had been delivered from the Deeds Office in Bloemfontein.
6. The terms of the second sale agreement were that the property was sold again by Sebotsa for R 324000.00 to the Hlabanes, inclusive of the agent’s commission; and the purchase price was to be paid after Sebotsa received the title deed from the municipality.
7. The full purchase price was paid by the buyer to Retika, the estate agent; and a deposit of R 150000.00 was paid to Sebotsa; who confirmed that the balance of the purchase price should be paid to him only once he received the title deed from the municipality.
8. The transfer to Sebotsa from the municipality was registered in August 2012; and in December he wrote to the Hlabanes demanding payment of the balance, despite the fact that he had not, as yet, received the title deed from the municipality.
9. Then, after 21 days, he wrote to Retika requesting the cancellation of the agreement as he deemed the Hlabanes to be in breach of their contract.
10. The Hlabanes, having paid a further R 150000.00 into the trust account of the transferring conveyancers were concerned that Sebotsa would/could alienate the property and sell it on to a third party; and they then approached the court for an order obliging Sebotsa to transfer the property to them.
11. The main question before the court was whether the payment of the purchase price to Retika, the agent, who had refused to pay it over to Sebotsa before transfer to the Hlabanes had taken place, constituted proper payment of the purchase price of the property by the purchasers.
12. The court found on the facts that Retika was wrong in withholding the money from the seller; because of the actual wording of the signed deed of sale; but also held that Sebotsa was legally not entitled to demand or receive payment of the balance of the purchase price until transfer actually took place.
13. The court in its judgement stated: “It would be irresponsible, in any situation, for the entire amount of the purchase price to be paid to the seller before transfer took place, as he could possibly then frustrate the transfer or abscond with the money before transfer had actually taken place.”

The lesson here for buyers is: Do not pay the full balance of the purchase price until transfer of the property into your name is due to take place immediately.
This case only involved an amount of R 324000.00; but there have been cases where buyers have paid R 2 million and more upfront for their properties before the legal registration process in the applicable Deeds Office is complete; and they could easily have burnt their fingers severely, in some instances, and lost that entire amount and lost the property as well.Do not let this or something similar happen to you.

We reiterate that if you are wanting to buy a house get proper, professional legal advice before you take this step in your life. If you have a query regarding a house purchase, please contact The Legal Advice Office direct and/or our legal consultant, Hugh, as soon as possible for obtaining proper, professional legal advice.

Hugh was previously a practicing conveyancer and has 20 years practical experience in the field.Hiscontact numbers are: 082-0932304 (preferred) or 028-3162832, where you can leave a message if he is unavailable. You can also send us an email to This email address is being protected from spambots. You need JavaScript enabled to view it. -Click on the  EMAIL BUTTON on the left side of this page.

Alternativly, you can browse our website if you need any help, legal advice or legal services at www.legaladviceoffice.co.za or send an email to one of our email addresses; either This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it. and we will revert within 48 hours.

Thank you.

The Legal Advice Office Team.

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South Africa

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