During 2020 a court case between Helm Construction and the Noortman’s, grabbed the attention of everyone in the property market.

The parties had a lease agreement, which they worded as a provisional sales agreement, regarding a farm.   However, the agreement did not comply with the normal requirements.  No mention was made of the Purchase price amount, how it would be paid, nor when registration would take place, which is the basis of any sales agreement.

The purchaser/ lessee started to pay the “Purchase price” as verbally discussed between the parties, and after paying about R 2 Million rand, a dispute arose between them  and the purchaser asked for his money back.  The seller refused and a court case was started.

The court held that the parties did not comply with Section 2 of the alienation of land act, wherein property can only be sold, by signing a written deed of sale. In the absence of a valid sale agreement, Helm was entitled to receive back what  had been paid to the Noortmans in respect of the purchase price.

The lesson to be taken from this case is to ensure that you use qualified agents and conveyancers to complete your property transactions, as there are several legal requirements that need to be adhered to and a simple hand shake will not do the trick.