Page 12 - Nexia SAB&T Property and Tax Guide 2025

THE DEED OF SALE

A written agreement must be drafted and signed. A verbal sale agreement in respect of
immov able property is unenforceable and void in South Africa. The following are some
important clauses to be borne in mind:
DESCRIPTION OF THE PROPERTY AND PARTIES
The property and parties must be properly defined, so as to be capable of identification
from the very wording used in the agreement.
UNFAIR CONTRACT TERMS PROHIBITED
In terms of the Consumer Protection Act (68 of 2008), or “the CPA”, unfair contract
terms are to be prohibited in deeds of sale to which the Act applies. Note that it is still
ambiguous as to whether the CPA applies at all to residential property sales, as a seller
in these “once off” private sales, may not be deemed to be a supplier selling goods in
his/her ordinary course of business, as defined in the Act. Where the CPA does apply,
each case will be determined on its merits as to what is deemed to be fair or unfair
contract terms. Notwithstanding the above, the general view is that Section 49 of the
CPA should be taken cognisance of in all cases– and provision should be made that any
waiver of liability, assumption of an obligation, or waiver of a right is drawn specifically to
the attention of both parties to the agreement in a conspicuous manner.
PURCHASE PRICE & PAYMENT
◆ The price offered must be clearly stated, written both numerically and
alphabetically.
◆ Sellers normally do and should require the payment of a deposit, which shows
good faith, and the financial ability on the part of the purchaser and also
provides security for the seller to cover its losses should the purchaser breach the
agreement. As a purchaser, it is advisable to stipulate that the deposit be held in
trust in an interest-bearing account, for the purchaser’s benefit pending transfer
by the conveyancer [and dealt with in accordance with Section 86(4) of the Legal
Practice Act (28 of 2014)], or “the LPA”.

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