Word­ing vi­tal in sales doc­u­ments

Weekend Argus (Saturday Edition) - - PROPERTY -

A KWAZULU-NATAL High Court rul­ing in­di­cates the im­por­tance of prop­erty de­scrip­tion in a sales doc­u­ment and of en­sur­ing sig­na­to­ries are au­tho­rised to act.

The de­ci­sion by the South African Rev­enue Ser­vices to al­low in­di­vid­u­als to take pos­ses­sion of prop­erty pre­vi­ously held by trusts, close cor­po­ra­tions and com­pa­nies without pay­ing trans­fer du­ties (pro­vided they act be­fore the end of 2011) has re­sulted in a flurry of trans­fer ac­tiv­i­ties – and some of th­ese have al­ready gone through ahead of the ini­tial pro­jected date.

So far so good. How­ever, Lan­ice Stew­ard, manag­ing di­rec­tor of Anne Porter Knight Frank, has drawn at­ten­tion to a court case re­ported in Milton Matsemela’s lat­est Le­gal News­let­ter.

This case re­lated to the sale of a prop­erty in a close cor­po­ra­tion, and Stew­ard says it shows the im­por­tance of de­scrib­ing prop­er­ties fully and com­pletely in le­gal doc­u­ments, and en­sur­ing that the par­ties who sign the agree­ments have full au­thor­ity to do so.

“The High Court ques­tioned the mean­ing of cer­tain terms (in­clud­ing the ac­tual word “cer­tain” when ap­plied without fur­ther qual­i­fi­ca­tion to prop­er­ties) and ruled that the word­ing was am­bigu­ous,” says Stew­ard. “It also ruled that the sale con­tract was not bind­ing be­cause it had been signed by only one mem­ber of the close cor­po­ra­tion.

“In South African law it is ac­cepted that a sin­gle di­rec­tor of a firm may sign on be­half of that com­pany. How­ever, the court found that a sim­i­lar pro­vi­sion does not ap­ply to close cor­po­ra­tions or trusts.”

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