Info withheld, can I cancel my contract ?
Category Deed of Sale and Information
A home buyer reader says he signed a contract to purchase, but was never informed that the property was in a deceased estate. The sale is being delayed, and he asks if he can cancel the contract and have all his guarantees refunded. Is he responsible for the costs if information was withheld?
I signed a sale agreement, and in the contract there was no stipulation that the property was in a deceased estate being sold by a spouse. I was promised that occupation would commence within be three months. When I inquired about signing the transfer documents I was told the process was being delayed because documentation required by the High Court was not disclosed and submitted. The process has been delayed indefinitely and I have had to renew my rental contract for 12 months.
I want to pull out of this deal and have all my guarantees refunded. Can I be held responsible and charged costs for something that was not disclosed and not my fault?
Jaco Rademeyer, from Jaco Rademeyer Estates, responds:
It is important to note that in order for the legal position to be identified with utmost certainty, the documents, i.e. contract of sale etc. has to be carefully perused.
The contract of sale has to state somewhere that the seller is "The Executor of Estate Late X", as the property which belonged to a deceased person falls into that person estate upon death and the executor administers the estate. From the information given it does not seem that the wife is the sole owner of the property, as she would not sell the property "from the estate" if she is the sole owner. The possibility exists that she may be the executor of the estate, but this has to be disclosed as this is the capacity in which she sells the property.
Should it not be disclosed that the seller is the "Executor of the Estate Late X", there is a material error in the agreement as the Alienation of Land Act requires a contract to contain the names of the parties to the agreement and an executor cannot sell such a property in his or her personal name, but may sell in his or her capacity as executor. The idea behind this is that the parties to the agreement have to be identified.
In may well be the case that the wife is the executor and also the co-owner of the property, in that case the property has to be sold by her in her personal capacity and in her capacity as executor.
A material misrepresentation is a ground for cancellation of the agreement by the purchaser provided it can be shown that the purchaser would not have entered into the agreement if he or she was aware of the specific fact.
Another possibility which exists is that the wife did not have the authority to sell the property out of the estate as she is not the executor of the estate and does not have the necessary letter of authority in respect of the estate from the Master of the High Court. This should be ascertained as soon as possible.
It seems that the property was sold on condition that the occupation date would be after or within 3 months? The Alienation of Land Act requires the occupation date to be stipulated. Does the contract state the date? It is possible that the date is stated and that you did not receive occupation on that date. This is breach of contract.
The fact that you had to enter into a new lease agreement amounts to damages that you have suffered as a result of the misrepresentation when the agreement was, allegedly, concluded. You can recover damages in the event of cancellation.
A guarantee cannot be refunded, it may be cancelled. A deposit given may be refunded.
The best advice is to see an attorney and have all the necessary documents perused before any decision is made, it might be that you really want to purchase the property.
Source - Property24