When putting in an offer to purchase on a property, all clauses of any nature where there is a requirement of performance on a party need to have a date by which this must be performed or there will be negative consequences.
It is very important to ensure on the signing of an offer to purchase that all suspensive conditions have dates by which completion should take place, emphasises Steward. “An open ended contract is not a complete one, and had the buyer in this case had a date to work on, he could have saved a lot in time and the costs of having to go to court.”
This is according to says Lanice Steward, managing director of Knight Frank Anne Porter, who says frequently, real estate agents write clauses into a sales agreement, forgetting to put in a date.
What are the implications of this?
In a recent Smith Tabata Buchanan Boyes newsletter, the case Hanuschke Beleggings CC v Kungwini Local Municipality shows that the agreement will lapse if the conditions are not filled in a reasonable time.
In this case an agreement of sale did not give a due date for the suspensive clauses in the contract and the sale lapsed, says Seward.
Here Hanuschke was informed in August 1996 that the sale was going ahead and that the suspensive conditions were in the process of being fulfilled. In February 1997 another confirmation of this came through but by February 1998, even after being told that the processes were still going ahead this was not done.
Years went past and by 2006, when Hanuschke issued a summons against Kungwini, the court held that the agreement had lapsed.
To ascertain whether a reasonable time has gone by, the particular case's circumstances have to be considered, says Steward. “If there are plans that need to be passed, for instance, because it takes so long for plans to be approved, a reasonable time for this would be six months to a year.
"If it was building a wall or removal of rubble, the time given could be around one month.”
If the case ends up going to court, the courts will determine what the reasonable time would be.
It is very important to ensure on the signing of an offer to purchase that all suspensive conditions have dates by which completion should take place, emphasises Steward. “An open ended contract is not a complete one, and had the buyer in this case had a date to work on, he could have saved a lot in time and the costs of having to go to court.”
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