“The sale is subject to the Law Society Conditions of Sale (1989 Edition) in so far as they are not inconsistent with the conditions in this agreement.”
The LSK Conditions of sale (1989 Edition) are boiler plate set of conditions to aid in drafting of agreements and guide the sales and conveyancing process. They outline how critical matters are to be dealt with including:
- Interest on purchase money
- Objections and requisitions
- Easement, Liabilities
These are meant to protect the parties in case of default. In the event the vendor defaults, common practice is to return the deposit paid by the purchaser mostly with some interests guided by the market rates.
In the event of a default by the purchaser, the vendor is entitled to serve the purchaser with a 14 day notice and when the same expires, the Vendor at his sole discretion has the option of either extending the completion period or rescinding the agreement in writing.
Rescinding of an agreement: It basically means to declare a contract void—of no legal force or binding effect—from its inception and thereby restore the parties to the positions they would have occupied had no contract ever been made. In the event this happens due to failure of the purchaser to comply, then the purchaser loses the 10% deposit.
This is usually done by way of exchange of completion docs and balance between Vendor and purchaser respectively or upon successful registration of the transfer in the name of the purchaser.
Another common practice of late is signing on every page for the vendor and the purchaser just to make sure that a malicious party does not pluck out unsigned pages and replace them with unfavorable conditions or different content.
For the agreement to be valid, a Certificate to identify the vendor and purchaser, must be done by an advocate.
Another condition of late relates to simply stating who drew the agreement. “Drawn by”
Is an agreement which has not been witnessed by an advocate legal? Yes if there is a witness. However, the transfer documents must be certified by an advocate licensed to practice. Also certification of the other docs as true copies of the origin must be done by an advocate /notaries public.
Who is this notaries public? A person legally empowered to witness and certify the validity of documents and to take affidavits and depositions. Wow..and what is an affidavit? A written statement of facts voluntarily made by a person under an oath or affirmation administered by a person authorized to do so by law.
Arbitration of disputes
In the event there is a dispute between the parties over the agreement, they should issue a notice of 7 days to each other with a copy to their witnessing advocate who shall within 7 days invite both parties to a joint meeting and may arbitrate any disputes and his decision is binding and can only be reviewed by an arbitrator appointed by the two parties but in the event they cannot agree, then an arbitrator will be appointed by the Chartered institute of Arbitrators to arbitrate the dispute.
And what is power of attorney: A written document in which one person (the principal) appoints another person to act as an agent on his or her behalf, thus conferring authority on the agent to perform certain acts or functions on behalf of the principal. This means you can grant a person authority to act on your behalf and that includes the sales process. A power of attorney generally is terminated when the principal dies or becomes incompetent, but the principal can revoke the power of attorney at any time.
Enough of the agreement and the legal jargon.
Next we will look at the subdivision process…