Recent court decision could have implications for anyone in property dealing
du Plessis, the Chairman of the Cape Peninsula area Committee of the Institute
of Estate Agents, has drawn attention to a recent Supreme Court of Appeal
decision that could have far reaching implications for anyone involved in
property dealing with close corporations.
The case has been fully described in Fairbridges Law Letter, which, said du Plessis, gives an admirable summary of what in fact happened.
In this case a certain Mr Pillay signed a standard sales form agreement offering to buy a members interest in a close corporation that owned a unit in a KZN sectional title development.
The member, a Mr Shaik, did not sign the sale agreement. Nevertheless, he instructed his attorneys to take a deposit from Pillay and to get copies of his ID document and marriage certificate, all of which are required to complete a close corporation sale agreement.
Shaik then, however, changed his mind about the deal and felt entitled to do so as he had not yet signed the agreement. Pillay responded by saying that he had not only accepted his offer verbally but had taken the actions described above which in his view confirmed the sale.
In its decision the Court of Appeal noted that the Close Corporation Act does not require the sale of a members interest to be in writing, even where the corporation owns immovable property.
An unsigned agreement could, therefore, be enforceable. In this case the seller was deemed to have shown by his actions that the sale was expected to go ahead and he had given the buyer adequate reason for believing the deal to be a fait accompli.
This case, said du Plessis, should serve as a warning to those with fickle minds and an inability to make decisions finally one way or the other as sometimes does happen in property transactions. It is still highly unlikely that in a case where the seller is a natural person, not a cc, anything other than a signed document would be considered binding but the doors are now open for debate on the validity of implied acceptance by behaviour. It is absolutely essential, therefore, that both buyers and sellers get agreements comprehensively signed by both parties if they wish to feel completely safe.
Article by: www.vineyardestates.co.za