Author : Millers Attorneys
Cooling-Off – Period for Purchasers
In terms of the Alienation of Land Act, fixed property can only be sold by way of a written agreement between a seller and a purchaser. The act was some time ago amended to afford purchasers a “cooling-off” right.
Where a purchaser makes an offer on a property with a value not exceeding R250 000 he/she may one-sidedly cancel the agreement within five days of the date he/she made that offer by way of a written unconditional notice to the seller or the agent involved in the transaction. In the calculation of the five days, the date on which the offer was made is excluded, as well as Saturdays, Sundays and public holidays.
A purchaser is only entitled to exercise this “cooling-off” right where he/she buys residential property or property intended for residential purposes. This also includes sectional title properties and shares in share-block companies. However, a purchaser buying agricultural land or a commercial building does not have a “cooling-off” right. Only natural persons are entitled to the “cooling-off” period. Where a company, close corporation or trust buys property, there is no “cooling-off” right that may be exercised.
The “cooling-off” period is however not applicable under certain circumstances such as where the property was sold at a publicly advertised auction, where the purchaser previously made an offer on the property on terms similar to his first offer, where the purchaser reserved the right to nominate another person to take transfer of the property or where the purchaser bought the property by way of an option that was open for acceptance for a period of not less than five days.