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A conveyancing claim

24 April 2014

The claimant entered into a sale agreement with an estate duly represented by the then executor AB. Material terms of the sale agreement were inter alia:

• The purchase price was R250 000.00, payable as follows:

  • A cash deposit of R220 000.00 on signature of the sale agreement which was to be held in trust in an interest-bearing account by the transferring attorney pending registration of transfer;
  • R30 000.00 on registration of transfer to be provided by a financial institution and secured by way of a guarantee;

• The sale agreement was subject to a suspensive condition which stated as follows:

Master and beneficiaries’ consent

Insofar as may be required in law this sale and the terms and conditions hereof are subject to all necessary consents being obtained from the Master of the High Court or the beneficiaries in the estate referred to in the introduction to this agreement, or both, as the case may be. Should such consent not be obtained, or should the Master of the Supreme Court decline for any reason to furnish a certificate in terms of section 42(2) of the Administration of Estates Act 66 of 1964, then this agreement shall lapse and be null and void. In such event, the seller shall be obliged to repay to the purchaser all amounts which have been paid by him by virtue of this agreement against payment by the purchaser to the seller of reasonable compensation for all benefits which the purchaser has had as a result of this agreement in particular but not limited to occupational interest as calculated in terms of 2 above, but the parties shall otherwise have no further claims against each other.

The claimant duly complied with her obligations in terms of the sale agreement and paid R220 000.00 to the conveyancers.

The conveyancers paid X Bank a total amount of R117 839.47 in full and final settlement of the estate’s mortgage bond obligations in respect of the property. As a result of this payment the mortgage bond was settled in full, thus discharging the estate’s obligations and liability towards X Bank.

A Power of Attorney to Transfer was prepared and forwarded to the Master of the High Court for endorsement in terms of Section 42(2) of the Administration of Estates Act. The Master refused to do so, as he required written consent to transfer from the guardian of the minor child of the deceased. Such consent was refused.

The claimant accordingly invoked the provisions of the suspensive condition in the sale agreement, declaring the sale null and void. The claimant claimed repayment of the deposit of R220 000.00. As this amount had already been paid to X Bank, the conveyancer was not in a position to repay the deposit to the purchaser.

This could have been an open-and-shut case where the conveyancer might have been held responsible for the claimant's loss, but the situation is further complicated by the following:

  • The claimant signed the sale agreement in respect of the property in question, which X bank was threatening to foreclose on because of the unpaid mortgage bond. It was expressly agreed between the executor and the claimant that the money deposited was to be used to save the property, by paying it over to X bank. The executor contends that the full implications of this course of action were explained to the claimant.

  • The claimant failed to pay the occupational rental of R100000.-- per month for a period of almost four years.

  • The claimant had also left the property in a dilapidated, inhabitable and damaged state of repair. The damage to the property amounts to an estimated R300 000.00 (i.e. more than the purchase price).

 

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