In order for you to have a valid sale of your property, both the seller and the purchaser need to sign a written agreement. When the purchaser signs the agreement, he is making an offer to the seller. Once the seller signs the agreement, he accepts the offer and a valid agreement of sale is concluded
Selling company property
Where a company is selling the property, the following provisions of the Companies Act 71 of 2008 apply.
In terms of section 112 (2) of the Companies Act 71 of 2008, a company may not dispose of all or the greater part of its assets or undertaking unless:
- The disposal has been approved by a special resolution of the shareholders in accordance with section 115; and
- The company has satisfied all other requirements set out in section 115, to the extent that those requirements are applicable to such disposal of the company.
In terms of section 115 (1) despite section 65 and any provision in a company’s Memorandum of Incorporation, or any resolution adopted by its board or holders of its securities to the contrary, a company may not dispose of all or the greater part of its assets or undertaking, implement an amalgamation or a merger or implement a scheme of arrangement unless-
- The disposal, amalgamation or merger or scheme of arrangement-
- Has been approved in terms of this section; or
- Is pursuant to or contemplated in an approved business rescue plan for that company in terms of Chapter 6.
Section 115(2)(a) states that the proposed transaction must be approved by a special resolution adopted by persons entitled to exercise voting rights on such matter, at a meeting called for that purpose and at which sufficient persons are present to exercise, in aggregate, at least 25% of all of the voting rights that are entitled to be exercised on that matter.
A company may not proceed to implement the resolution without the approval of the court if the resolution was opposed by at least 15% of the voting rights that were exercised on that resolution and any person who opposed the resolution requires the company to seek court approval in terms of Section 115(3). Should the Shareholders of the company not consent, the sale will be void ab initio.
The Close Corporation Act 69 of 1984 has a corresponding provision. Section 46(b)(iv) of the aforementioned Act requires that members holding at least 75% of the total member’s interest of the Close Corporation must consent in writing to “any acquisition or disposal of immovable property by the corporation”.
Therefore, an agent representing the Close Corporation must be authorised in writing in order for them to bind the corporation as either a purchaser or seller.
Payment of the deposit
If a deposit is payable to an estate agent or an attorney, the deposit will be invested in an interest-bearing account for the benefit of the purchaser. On registration of the transfer, the interest will either be paid to the purchaser or set off against any fees still outstanding.
Where a deposit is payable or a mortgage bond is to be obtained, it is said that the agreement of sale is subject to suspensive conditions. Should the suspensive conditions not be met within the specified time, the agreement is null and void.The result is that the parties are to be returned to the original position that they were in before the agreement was concluded.
If the purchaser has already paid the deposit, the deposit as well as the interest is to be returned to the Purchaser.
Using an estate agent
When a seller wants to sell their house using the services of an estate agent, a mandate between the seller and the agent is entered into.This mandate could be a sole mandate where only one agency is entitled to market and sell the property or it could be a joint mandate whereby a number agencies are to market and try to sell the property.
In terms of the Section 26(1) of The Estate Agency Affairs Act 112 of 1976, an agent is only entitled to earn commission if he has obtained a Fidelity Fund Certificate.
In the case of Wakefields Real Estate (Pty) Ltd/ T Baboolal and B Baboolal the court held that in order to determine whether the agent is entitled to commission, one must determine whether the agent was the effective cause of the sale.
This means that an agent has fulfilled his mandate once it can be said that he is the effective cause of the sale. In order for the sale to be valid and binding, all suspensive conditions contained in the sale agreement must be complied with.
When a sale is not a sale
Should the suspensive conditions not be met, the agreement is void and no sale will occur. In such an instance the parties are returned to their original positions and the seller would not be liable for the estate agent’s commission.
Problems often occur where there is a joint mandate and the purchaser was introduced by one Agent, however the agreement of sale between the parties was concluded with the assistance of another agent.
In the above instance, one would need to establish whether the first agent was the effective cause of the sale even though the second agent assisted with the signing of the agreement.
Should it be proven that both agents were the effective cause of the sale, the Seller could be liable for double commission.
Appointment of the Conveyancer
The seller has the right to appoint the conveyancer who is to deal with the registration of the transaction in the Deeds Office.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)