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Property Lockdown Q&A with DupWest Inc.
16 April 2020
 
With the lockdown period extended many South Africans currently involved in property transactions have encountered difficulties never encountered before.

In this article we will explore numerous questions posed during the lockdown and which require legal clarity.

Due to the lockdown of the Deeds Office and certain departments of Municipalities, no registration of properties or bonds are possible at this stage.

These closures will cause delays in the registration process that will influence parties’ rights and obligations

Below are a few of FAQ’s you also might have:

Q: Occupation dates
If a certain occupation date was agreed upon in the written purchase agreement, and such date falls within the lockdown period, the performance of the said clause becomes impossible. If performance in terms of an agreement becomes impossible, the agreement might be cancelled. However, the performance in the agreement must be an essential part of the agreement for the agreement to be canceled. In most cases the occupation clause would not be considered an essential clause and it can easily be amended by extending the period. The parties would have to negotiate and agree on a different day.

Q: If one party decides to cancel the deal because he no longer wishes to sell or buy?
Neither party will have the right to cancel the agreement just because he or she does not want to proceed because of a personal whish or circumstance. An agreement can only be cancelled due to the normal contractual rights or if an essential performance to the agreement is impossible. What performances is essential toward the agreement will depend on each situation. If the reason for wanting to cancel is financial, such as affordability, the Credit Act may play a part and the suspensive conditions of the agreement may also not be able to be fulfilled. It is advisable for any party to seek proper legal advice before officially indicating that you want to cancel the agreement.

Q: Can all the necessary paperwork be done during lockdown?
Dupwest, will prepare all the documents during lockdown, request cancellation and clearance figures and do anything possible to prepare the matter in order to register as quickly as possible after lockdown. There are documents that can be emailed to the parties for signature, but unfortunately some documents need to be originally signed and commissioned before a commissioner of oaths. These documents will have to be signed after the lockdown period.

Q: Is there anything parties should be aware off when cancelling a property agreement when the seller and the purchase agreed to cancel the agreement?
One should read the estate agent commission clause very carefully. In most cases where an estate agent is involved the clause reads that should the transaction be cancelled due to mutual consent; the estate agent has the right to sue any of the parties for the estate agent commission as agreed between the agent and the seller. If the attorneys were already busy with the transaction, they might have a claim for wasted cost incurred in preparing the documents or other services rendered.

Q: What are the consequences when one party decides to cancel the agreement without the right of cancellation?
If one party indicates that he/she is not willing to proceed with the agreement while the agreement is enforceable, it will be considered a repudiation of the agreement. The aggrieved party may then decide to accept the repudiation, which means that the defaulting party is in breach of the agreement. When a party is in breach, the aggrieved party must notify the defaulting party to remedy its breach within a certain period as stipulated in the agreement. Should the defaulting party refuses to remedy the breach, the aggrieved party may cancel the agreement. The defaulting parting may then become liable for any damages suffered by the aggrieved party, estate agent commission and wasted legal costs. The aggrieved party may also elect to claim specific performance from the defaulting party if the defaulting party is able to perform.
 
 
 
 
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