Sale of property held in co, cc or trust must still be in writing

Advice from a property MD: If you are selling a property which is held in a Company, a CC or a Trust it is still essential to record the deal in writing

When property sales agreements are arrived at involving individual owners, the Alienation of Land Act makes it mandatory that these are put in writing - but when a company, close corporation or trust sells the property the deal takes the form of a transfer of members’ interests, or an agreement to change the beneficiary of the trust and, strange through it may seem, these can be verbal contracts.

A significant proportion of property (including many residential properties) in South Africa today are still held by companies, close corporations and trusts and are sold via verbal contracts, says Tony Clarke, MD of Rawson Properties, - but, he warns, this has led to serious difficulties for those involved.

In the absence of written proof, says Clarke such agreements are likely to be fraught with risk.

“Differing interpretations all too often lead to complicated and expensive litigation processes.

"It is therefore essential, whatever form your agreement takes, that the deal is recorded in writing and that, as is legally required when individually owned property is sold, the property and the parties are clearly identified and that the prices agreed to and any special conditions, e.g. delays on transfer, are recorded. It is also absolutely essential that the agreement be signed by all parties with witnesses,” said Clarke.

Article by: www.rawsonproperties.com