Sale of Land

In just over 400 years from now, a song by The Beatles is apparently going to end up on Polaris, otherwise known as the North Star. ‘Across the Universe’ was converted into digital data, and beamed off into space by NASA on Monday 4 February 2008, the 40th anniversary of the recording of the song at the famous Abbey Road studios. It was a publicity stunt to commemorate NASA’s 50th anniversary. ‘Well done NASA’, said Sir Paul McCartney. ‘Send my love to the aliens’.1

Actually, perhaps the most respected scientist in the world since Albert Einstein reckons we should keep well away from aliens. The late Stephen Hawking feared that, if we made contact with beings in outer space, they could respond with hostility. So, even if we betray our presence with signals, the aliens could fire up their inter-galactic artillery and beam the whole earth into vapour.2

‘Alien’ really just means foreign, a stranger. It comes from the Latin word alienus, which means ‘belonging to another’. If you alienate someone, you make him feel isolated or estranged. If you alienate land, you put its ownership in someone else’s hands – that is, you sell it, or give it away.

The Alienation of Land Act 1981 is all about selling, exchanging or donating land – and the requirements and formalities that must be in place for the transaction to be legally enforceable. It falls under the authority of the Minister of Trade, Industry and Competition.

A. Insolvency during an instalment sale

If land is sold in a transaction which allows for the purchase price to be paid in more than two instalments over a period of more than one year, it is referred to in the Act as a ‘contract’.3

  1. If the owner of land sold under a contract becomes insolvent, or the land is attached by virtue of a writ issued by the court in favour of a creditor of the owner,4 the owner must, within 14 days, inform his trustee, or liquidator (if the owner is a company) or the judgment creditor of the names and addresses of any remote purchaser of the land and the intermediary involved.5 It is an offence not to do so.6

  2. If there is a mortgagee7 it must, within ten days after being notified of the insolvency or attachment, notify the trustee, liquidator or judgment creditor of the name and address of any purchaser (of which it was notified) in terms of a contract for sale on instalments. It is an offence not to do so.8

B. Building on ‘spec’

Sometimes, a house, or units in a housing estate (for example) will be built by a developer ‘on spec’. In other words, he doesn’t have any buyers yet, and goes about the construction on the speculation that he will sell the units, and so get his money back and make a profit. Sometimes, developers will sell units ‘off plan’ – which means that there is no building yet, just the plans.

  1. This is permissible, but it is a criminal offence to take any consideration (i.e. payment) from you for the sale if the units, or plots of land, are not capable of being registered each with a separate title deed in the deeds registry.9

  2. The same applies to a contract for the sale of land by instalments – which must be recorded with the Registrar of Deeds. If the contract has not been recorded, it is an offence to receive any money for the sale.10

C. Cooling off period

After you (or your agent) have signed an offer to purchase land11 or a deed of sale, you have five days to get out of the deal – you do this by written notice to the seller or his agent.12

Now, if you sign another (different) offer to purchase, or a deed of sale, within that five-day period and have not terminated the first transaction, you are deemed to have terminated it. However, you commit an offence if you do not notify the seller (in the first transaction) as soon as you sign the later offer.13

  1. – ‘Beatles to be beamed’. 

  2. ‘Why Stephen Hawking is light years from the truth about dangerous aliens’. See also ‘Stephen Hawking is Still Afraid of Aliens’. 

  3. See the definition in section 1 – ‘contract’. 

  4. That is, someone the owner owes money to – the ‘judgment creditor’. 

  5. A remote purchaser is one who buys from an intermediary. 

  6. Section 21(5) read with section 21(1)(a)(i). 

  7. Usually the bank – someone who lends money to buy property, and the loan is ‘secured’ by a mortgage bond over the property, is called the ‘mortgagee’. 

  8. Section 21(5) read with section 21(1)(a)(ii). 

  9. Section 26(2) read with section 26(1)(a). 

  10. Section 26(2) read with section 26(1)(b). 

  11. This includes a plot, and includes the buildings on it; and an apartment in a sectional-title complex. 

  12. Section 29A. 

  13. Section 29A(8)(b).