Generally, you may find a purchaser whom is easily impressed by a sales proposition, with the alternative to this being a purchaser whom is naturally cautious. The former may rush into signing offers to purchase, which are legally binding, without being 100% certain of their decision to purchase a property or perhaps being in a position to actually fulfil their contractual obligations.
As a measure of protection to vulnerable lower-income households, section 29A of the Alienation of Land Act 68 of 1981 introduced a cooling-off period, applicable to instances where a purchase price does not exceed R250 000.00.
This section grants the purchaser a cooling-off period of five (5) days after signature, to reconsider his or her purchase, and during this period the purchaser may revoke their offer to purchase by way of written notice to the seller.
Written notice to the seller will only be effective if:
- it is signed by the purchaser or his authorised agent;
- it identifies the offer being revoked; and
- it is unconditional.
When will the right not apply?
Although section 29A provides a protection mechanism as mentioned above, it cannot be exercised in all instances. Section 29A will not apply if:
- the purchase price exceeds R250 000.00;
- the purchaser is a trust or a person other than a natural person;
- the purchaser or agent has purchased the land at a publicly advertised auction;
- the seller and purchaser have previously entered into a deed of alienation for the same land on substantially the same terms;
- the purchaser has reserved the right in terms of the offer to nominate or appoint another person to take over the rights and obligations of the purchaser as stipulated in the offer;
- the purchaser purchases the land by the exercise of an option which was open for a period of at least five days.
Further to the above, section 16 of the Consumer Protection Act states that a consumer may rescind a transaction resulting from any direct marketing without reason or penalty, by written notice to the supplier within five business days after concluding the agreement or delivery of the goods, whichever comes later. The key words here being ‘direct marketing’ – this section of the Consumer Protection Act will not apply if the sale is not as a result of direct marketing.
Always exercise caution, and if in doubt contact the MacRobert Property team.
