In December 2012 I helped my son and his...

Asked by isaacpfaff on 09-05-2014 12:04:18
Question posted in the Property Law category relating to Western Cape
Question value: R 200.00

In December 2012 I helped my son and his wife to buy a plot in Hout Bay. Unfortunatly they chose to use the sellers lawyer to represent them for the transfer process with the result that they have up to now not received the rates clearance.

The owner now claims that he has a dispute with the City of Cape about the rates account,however,my research has shown that the rates account has been outstanding and not been paid since 2011.

At the time when I transfered monies into the lawyers trust account and when my son and the seller both signed the OTP, we were not informed by neither the seller nor his lawyer,that there was a issue with the rates account and that the seller will not be settling the rates account timeously.It is only now,after much pressure from my son,that he was informed about this problem.

Do I or my son have grounds for laying criminal charges.

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Answer to the Question

Posted by Att. Patrick on 09-05-2014 15:18:07
Hi there and thank you for your question,

It is normal that the seller's attorney attends to the transfer process, as the seller is the one that needs to be protected. The purchaser must just pay the costs of the transfer, which includes the seller's attorney's fee account.

Legally speaking, your son (as the purchaser) has the right to demand that the seller passes transfer of the property to him by the date that is mentioned in the offer to purchase. If the seller can't pass transfer by that date (due to whatever reason), then the purchaser must put the seller to terms and demand transfer.

If the seller still can't (or refuses) to pass transfer of the property, then your son is entitled to cancel the offer to purchase in writing, and get his money back. He could also sue the seller for lost profit, etc. But, if your son wanted to sue for lost profit, he would need to sue the seller.

Basically, read the offer to purchase. Put the seller to terms. If the seller does not perform, cancel the offer to purchase in writing, and demand your money back.

The fact that the seller has been involved in a dispute with the City Council regarding his rates is really neither here nor there. That is the seller's problem. Your son can't hold the seller liable for criminal charges or whatever because of this dispute. The seller also didn't have to advise your son of the dispute prior to the offer to purchase being signed. It is a mess for the seller to work out.

If the seller can't work it out with the Council, then the seller will be in breach of the offer to purchase, and your son can cancel it.

My advice would be for your son to take the offer to purchase to his own attorney and ask the attorney to cancel the offer in writing.  

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

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Information provided by client

Thank you for your response. However,there is one aspect that you did not address,specifically,do I have any legal recourse.

As I outlined, I contributed to my son's purchase of the Hout Bay plot, and paid the monies directly into the seller's, attorneys, bank account. Does this mean that I can sue the seller for loss profit ( asking for a refund is not a option).

My reason for taking this position is that I am a Quantity Surveyor and when I invested in the purchase the plot it was pointed out to the sellers estate agent that I will be Project Managing the construction of the house and thereby saving my son a substantial amount of money. My original investment was made in 2012, and now two years later we are still waiting for the rates clearance.

Answer to the Question

Posted by Att. Patrick on 18-06-2014 23:42:33
Hi there, 

From what I understand, you are not actually a party to the sale agreement. Your son is the purchaser, and the third party is the seller. You just happened to "loan" or assist your son with the deposit that was required to be paid. So, you don't actually have any claim against the seller or the attorney. Any claim that would exist, would be claimed by your son. 

Furthermore, in my legal opinion you wouldn't be able to sue the seller for your lost profit, as you are not a party to the agreement. 

If you wanted to sue somebody, it would unfortunately need to be your son. You loaned him the money, and due to a delay you've lost out on profit. You probably don't want to sue your son, so that option is out. 

Ideally, your son needs to sue the seller for either specific performance (ie transfer the property to me now) or for cancellation and damages. Ie. Cancel the contract and give me my money back together with the money I could have made on my money if I had invested it somewhere else. 

That's what I would suggest! 

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