Hi I am in the process of purchasing a p...

Asked by ClaytonH on 20-02-2018 15:55:09
Question posted in the Property Law category relating to North West
Question value: R 350.00


I am in the process of purchasing a property with a standard OTP from the agent . I have obtained finance , paid the deposit and met all of my obligations to the contract. The seller however has a dispute with the HOA regarding her settlement amount in levies. It will be 5 months without any progress. Despite numerous pleas by the agent and conveyancers to come to a resolution she simply will not pay.

Is she not obligated to settle the HOA and rates acocunts regardless of settlement amount? And can she inevitably cancel the sale by not settling with the HOA

I do not have the time or energy to start again with the property search and finance application. The property was very specific to my needs.

Kind Regards


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Answer to the Question

Posted by Att. Patrick on 20-02-2018 21:03:11

Hi there and thank you for your question,

It looks like you are looking at a straight forwards breach of contract.

If your OTP contains a clause which says that transfer is to be registered on (or as close to) a certain date, and the seller has not caused transfer to be registered by that date, then you have a claim against the seller for:

- either a breach of the contract which would enable you to cancel the contract; or

- specific performance, which is really a nice way of saying "give me transfer".

If the OTP says that transfer must happen as soon as possible, then unfortunately you are delving off into the area of "what is meant by as soon as possible"? To answer that, you would need to ask "Is it reasonable to expect the seller to pay the arrear rates within 1 month?"  I would say Yes. If you were to ask if it was reasonable that after 5 months the seller had STILL not paid the arrear rates, I would say NO, that's not reasonable at all.

It is NOT your fault that the seller has a dispute with the HOA regarding rates accounts / levies.

The seller has an obligation (in most OTP) to EFFECT payment of the arrear rates / levies. The seller Must do that. There might be some scope for the seller to argue that there is a dispute and it would take 4 weeks (or so) to resolve the dispute, but that's about it.

You need to decide. Do you want to cancel the sale, or do you want to continue. Once you've decided, you need to visit an attorney and ask him/her to assist you in applying to Court for an order of specific performance, ordering the seller to sort everything out that needs to be sorted out in order for him to pass transfer to you.

That will involve a High Court application, and some resulting legal costs - some of which could be recovered from the seller if you are successful.

The seller can't cancel your OTP simply because she doesn't agree with the arrear rates. She can only cancel the OTP if you've committed a breach, which you haven't rectified, after having received notice.

No, you need to be proactive now. You need to move forwards. You need to hire an attorney to proceed with a High Court application for specific performance, or cancellation.

I can't refer you to a specific attorney, but I can direct you to www.southafricanlawyer.co.za, where you can find a list of qualified attorneys in your area who will be able to assist you further!

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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Answer Accepted

This answer was accepted on 21-02-2018 13:45:36

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