I2. Alienation of Land

  1. No alienation of land after the commencement of this section shall, subject to the provisions of Section 28, be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.
  2. The provisions of subsection (1) relating to the signature by the agent of a party acting on the written authority of the party, shall not derogate from the provisions of any law relating to the making of a contract in writing by a person professing to act as agent or trustee for a company not yet formed, incorporated or registered.

The most essential feature, therefore, of a contract of sale is that it must be signed by both the Seller and Buyer before a valid contract exists. In fact, no agreement exists until this is done. It does not matter what negotiations have been conducted between the parties and the agent nor how much has been verbally agreed to. No contract whatsoever exists in any form until both parties have signed a written contract of sale. If a property is owned by two people separately and only one signs the contract of sale and purports to sell the whole property thereby, the Buyer – even if he has signed the contract – can withdraw from the deal by notice in writing at any time before the other owner signs. The contract is not valid until all parties have signed (although, if the part-owner makes it clear he is only selling his part-share in the property, the sale will be binding to this extent)

The key question arises: Who may sign a contract of sale? In terms of the definition given above the following not only may but must sign in their respective capacities:

  • The Seller or the Buyer in person.
  • Any agent acting with written authority on behalf of either party. This can include any person who has a Power of Attorney issued in his favour authorising him to sign on behalf of the respective party.
  • A Nominee for a Company or Close Corporation to be formed. (Once the Company is formed, the sale to the nominee must be cancelled and a new sale to the juristic person must be substituted for it)
  • A representative of an existing juristic person, such as a Trustee of any Family Trust, Director of a Company, or Member of a Close Corporation. In such a case it is essential at the time the contract is signed to have a written resolution signed by all the Trustees / Directors / Members appointing the relevant signatory to sign on behalf of the juristic person.

In passing it is import to mention that, where a Trust, etc., is still to be formed, the nominee must be bound in this personal capacity until formation takes place, otherwise there is no actual Buyer against whom you can act in the meantime if a breach of contract takes place or if occupation rental or any other payment due is not paid timeously.

In terms of Section 1 of the Alienation of Land Act, a deed of alienation (or in our language a normal contract of sale or “offer to purchase”) means a document or documents under which land is alienated. The use of the plural here means you can use more than one actual document to finalise a sale. For example, your Seller in Johannesburg can sign the original while your Buyer can sign an exact copy faxed/emailed to him in Durban. As long as both parties sign the same contract is does not matter if they sign separate documents. A faxed/emailed copy in the Agents possession bearing the Buyer’s signature and origin of fax/email is proof that a sale has been concluded even if the original is still in the Buyer’s possession.

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