Before 1981 two major Acts of Parliament covered the essential formalities of contract relating to the sale of immovable property. A very short Act, known as the Formalities in Respect of Contracts of Sale of Land Act, was passed in 1969 and prescribed one simple principle: that all such sale contracts had to be reduced to writing and had to be signed by both parties. In 1971 another much more comprehensive Act was passed known as the Sale of Land on Instalments Act which dealt with the commonly-called ‘deed of sale’ contracts whereby a Seller sold a property to a buyer on terms and did not give immediate transfer.
In 1981 a new Act was passed to incorporate both of these laws into one document and it is known as the Alienation of Land Act, No 68 of 1981. It is the most important law covering the sale of immovable property and it repealed both of the former Acts, incorporating them into one new Act. Most of the new Act incorporates the Sale of land Instalments Act and deals with the terms “deed of sale” but it also prescribes the basic formalities of any contract of sale.
From an early stage, it should be obvious to the new estate agent that the most important factor relating to any contract of sale is to ensure it is properly signed and completed and that it complies with all the basic laws covering the validity of immovable property law sales. Any fatal defects in the contract can give either the Seller or Buyer the right to withdraw from the sale with the result that the Agent will lose his commission.
The Alienation of Land Act of 1981 deals mainly with installment-contract sales but its first chapter is the most important of all laws dealing with any contract whereby immovable property is alienated (transferred) from one person to another. It is therefore important to quote the relevant section in full and it reads as follows: