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Verbal nomination agreement

29 October 2009

Du Toit Group (Pty) Ltd v Van Breda and Others (3128/08) [2009] ZAWCHC 152 (16 October 2009) - implications of a verbal nomination agreement to purchase property on behalf of another.

An awkward set of facts presented itself in this matter: A and B entered into an informal nomination/trustee agreement in terms of which B would purchase property on behalf of A and B jointly. Once the transfer was registered in B's name, he would then transfer a certain portion of the land to A. When B failed to honour the verbal agreement, A approached the Court for relief. The Court was ultimately asked to determine whether the informal nomination agreement constitutes an agreement of sale which required compliance with the Alienation of Land Act, 1968 and as a result, needed to be in writing.

The judgment is an interesting read and can serve as a warning to property practitioners to be alert to the consequences of informal agreements that their clients may have entered into and to advise them thereof before a dispute arises.

Full judgment and the Summary on Igqwetha Training Academy

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