Now time to secure an option to buy

As the property market and economic conditions improve, sitting tenants in rented accommodation should seriously consider getting an “option to buy’’ clause added to their rental agreements, property experts say.

Colleen Gray, MD of CENTURY 21 South Africa, says the suggestion makes considerable sense where tenants aspire to ownership of the flat, townhouse or cluster unit they are leasing.

“Economic uncertainties have obliged many to hold back on their property plans. However, with business conditions improving and consumer confidence much improved, tenants who aspire to home ownership may very well find that now is the time to bid for the very property they currently rent.

“That of course makes a number of assumptions. Firstly that the tenant does indeed wish to own this particular home, secondly that the landlord is willing to insert an option to buy into the rental agreement and thirdly that the conditions and time frame of the clause are mutually acceptable.”

Gray also cautions that both parties should be aware that once they both sign an option to buy, it becomes a contractual agreement that cannot be changed except by entering into another agreement that supersedes or modifies it.

“Tenants also need to remember that properties in this country are generally bought ‘voetstoots’ or as is. So apart from being sure you are keen to own the property, you should consider how any defects could influence your decision to exercise your option or might influence the price you are willing to pay. There will be no landlord on hand to fix things once you are the owner of the property.”

She says there are numerous other aspects involved in option to buy contracts as in any property transaction, and that professional help is always advisable. “The key factor in this scenario is that you do get first option on a property that you like, and that you can gain time to assemble a deposit and plan your finances.”

Article by: www.century21.co.za