Verbal Side Deals In Property Transfers Are Not Enforceable
In the world of property law, what you say doesn’t matter nearly as much as what you sign. A recent case from the Supreme Court of Appeal (SCA) serves as a tough lesson on why "side deals" and verbal promises won't protect you if a relationship turns sour.
Here are a breakdown of the case and the rules you need to know.
The Case: A "Side Deal" Gone Wrong
A husband and wife co-owned a house. When the husband ran into debt, he feared his creditors would take his half of the home. To protect the asset, the couple agreed that the wife would become the sole owner.
- The Paperwork: They signed a formal contract (Deed of Sale) saying she bought his half for R1.2 million. The house was officially registered in her name.
- The Reality: She never actually paid him the money.
- The Conflict: After they divorced, the husband refused to move out. He claimed they had a verbal "side deal" where she was just holding his half for safekeeping and promised to give it back later.
The Court’s Verdict: The wife is the 100% owner. The husband’s verbal claims meant nothing in the face of the written contract and the official property registry.
5 Hard Rules for Property Owners
1. Verbal Agreements are Worthless in Property
In most areas of life, a handshake deal is a contract. In property, it is not. By law, any agreement to sell, trade, or give away land—including promises to "transfer it back later"—must be in writing and signed. If it isn’t on paper, the law treats the deal as if it doesn't exist.
2. Vagueness is Deadly
The husband’s claim that he would get the house back "when it was less risky" was too vague for the court to enforce. For a contract to be valid, it must have specific details (dates, amounts, and clear conditions). If a deal is fuzzy, a judge will likely strike it down.
3. The "No Changes" Rule (Non-Variation Clause)
Most property contracts contain a clause stating that the contract cannot be changed unless both parties sign a new written document. Because this couple's contract had this clause, the husband’s claim that they "verbally changed the plan" was legally impossible.
4. If It’s Not in the Document, It Doesn't Count
Lawyers use a "Whole Agreement" clause to confirm that the written paper is the entire deal. This prevents people from later claiming, "But we also talked about X, Y, and Z." If you want a promise to be kept, it must be written into the main contract.
5. Why You Did It Doesn't Matter (Motive vs. Intent)
The court decided that because the husband intended to transfer the house to his wife’s name (to hide it from creditors), the transfer was legal and final. The fact that his motivation was to protect his assets—or that she never actually paid him the cash—didn't change the fact that he legally gave up ownership.
The Bottom Line
Co-owning property with a partner or friend is a great way to get into the market, but it requires "bulletproof" paperwork. Never rely on a spouse's or partner's word that they will "do the right thing" later.