Written authority necessary in property deals

In property law, those acting on behalf of others have to have written authority. A recent High Court case reported in the Smith Tabatha Buchanan Boyes attorney’s newsletter, has, says Lanice Steward, Managing Director of Anne Porter Knight Frank, shown how essential it is for sellers or buyers acting on behalf of a company, a trust or a close corporation to have the full authority in writing from fellow directors, trustees or members.

In the case Northview Shopping Centre v Revelas Properties, the husband of a close corporation member signed on behalf of his spouse. However, as the ruling in this case has confirmed, the Alienation of Land Act stipulates that any person acting on behalf of a company, a trust or a CC has to have the written consent of all those who control the body. In this case the husband acted without the apparent consent of his spouse and the court therefore ruled the sale invalid.

Steward commented that whereas in many other legal spheres verbal contracts or an ‘assumed meeting of minds’ contracts can be upheld by the courts, in property matters, everything has to be in writing and where this is not the case, litigants will have difficulty in making any court accept a condition or proviso.

“Regrettably,” said Steward, “this has enabled people on occasion to slip out of what were in fact genuine agreements but on the whole the insistence on written, signed evidence is sound. The lessons to be learnt from this latest case are that you have no power without written authority and, although this is not relevant in this particular case, one might add that so-called standard agreements can prove to be inadequate. If you are not dealing with a reputable, well known estate agency company or if you are selling privately with a standard agreement of sale of the type which can be bought at stationers, a good lawyer should be allowed to check the deal and to look for the potentially dangerous omissions just as vigilantly as for inaccuracies. Alternatively, you can avoid this added expense by dealing with a professional agency.”

Article by: www.anneporter.co.za