Whilst people remain at home under the Government lockdown, they might be tempted to buy and sell, lease and rent properties online, on a do-it-yourself basis: without having face to face meetings and also without inspecting the property. Typically, a tenant may decide to purchase the property, he already rents from his landlord.
So then the obvious question is: is a contract for the sale of land by means of WhatsApp, SMS and email, valid and watertight? No it is not! It will not be valid and binding.
Sale of Immovable Property and Sectional title must be in writing and signed by all parties.
Schedule 1 and Schedule 2 of The Electronic Communications and Transactions Act 25 of 2002 explicitly reinforces the provisions of the Alienation of Land Act 1981; which still requires that all contracts for the sale of immovable property must be contained “in a document, which is signed by the parties thereto.”
So therefore, any exchange of online messages purporting to be an agreement for the sale of land or Sectional Title apartment, will be completely null and void; because there is no document that has been reduced to writing and signed by both parties.
Subject to a final contract document, signed by both parties.
However, there is nothing to prevent negotiating by email or WhatsApp, with a view to concluding a finally signed contract document.
One must avoid contradictory proposals, vagueness and backtracks. Therefore, it is very wise to label each electronic message with the heading: “Subject to a final contract document, signed by both parties.”
So one would expect to see signed Offers to Purchase documents, being scanned from house to house to create a valid sale.
Offer to Purchase: “Subject to physical inspection and approval.”
If a purchaser wants to purchase; but wants to postpone his subsequent inspection and approval of the property, we recommend inserting this clause.
“Subject to the suspensive condition that the purchaser is able to physically view the property and submits his/her written approval of the purchase, to the seller, within 10 calendar days, after the Corona Lockdown has been withdrawn.”
Other Contracts can be concluded online
Incidentally, the above legislation does provide that other contracts concluded online, will be valid and binding on the parties. The only proviso; is that each message must contain an electronic signature which essentially is cyber data attached to other data intended by the user to be his signature.
So a lease concluded by an exchange of online messages will be valid. Of course, the content must be comprehensive and specific, to avoid disputes. Also, a rental agreement reached by discussions and an oral agreement is valid and binding. But to be safe and to have a proper record it is still advisable to have a bilaterally signed document.
Transfers and bonds being delayed by the Lockdown.
What are the rights of seller and purchaser, whose registration of transfer and payment of the selling price has been unexpectedly delayed? In the past, the courts have adjudicated on conveyancing delays, where these delays could not be avoided.
The law has always held that property transfers should be registered within a reasonable time, after the sale agreement was signed. The courts have also held that where both parties could not have foreseen a delay, beyond their control, the resultant delay would not be deemed to be unreasonable. (Young v Land Values and Nel v Cloete). And therefore a short Lockdown would not be regarded as an unreasonable delay.
Most conveyancing Firms and Home Loan offices are continuing to work remotely from home during the Lockdown. We have been told to expect that new Home Loan Mortgage Bond instructions will continue to be downloaded and must be attended to remotely.
So a lot of work is being done to work up the files, in preparation for sign-up by the parties, once the Lockdown has been withdrawn.
In conclusion, most conveyancers should be available to assist with offers to purchase agreements and will actually process the paperwork whilst the Lockdown is in place. The law has always held that property transfers should be registered within a reasonable time, after the sale agreement was signed.
Denoon Sampson is the Director at Denoon Sampson Ndlovu Inc, currently ranked the ‘number 1’ top performing conveyancer by First National Bank Limited. He has 30 years of experience as a conveyancer, specialising in the full spectrum of property-related law and is often called upon to give talks or contribute content on related matters.