The short answer
Legally, the seller can cancel the sales agreement only if a cancellation clause was included in the sales agreement.
The whole question
I have changed my mind about selling my house and stopped the sale before it reached the Deeds Office. Now lawyers are threatening to sue me for R56,000. What can I do?
The long answer
Once a sales agreement has been signed by both seller and buyer, it is a legally binding contract, which one party can’t just walk away from.
Legally, you as the seller can cancel the sales agreement only if you have included a cancellation clause in the sales agreement which stipulates the conditions under which either the seller or the buyer can cancel the sale. This is known as a general cancellation clause. If you can prove that you are cancelling the contract in terms of that clause, the cancellation would be legally valid.
The unforeseen consequences of Covid-19, which could be termed an Act of God, is another kind of clause which could be included in the sales agreement as a valid reason for cancellation. But the existence of Covid-19 doesn’t automatically entitle either buyer or seller to walk away from the contract. An Act of God, or in legal language, a “vis major”, has to be specified within the contract as a reason for cancellation.
The buyer could sue you for expenses rising from the sales agreement. For example, the wasted work of the conveyancing attorney. Though the seller appoints the conveyancing attorney or lawyer, the buyer pays for the work the conveyancing attorney does to have the property transferred. If the sale was stopped before it went to the deeds office, the conveyancing attorney could claim for the work already done to date. This could include communicating with you as the seller, the buyer, the municipality and the bank after being appointed and receiving instruction. It could include getting a Clearance Certificate from the municipality to say that all municipal bills have been paid for the last two years. It could be for drafting the transfer documents which must be lodged with the deeds office. The whole transfer process can take up to three months. Depending on how much work has already been done, it could add up to quite a lot of money in lawyers’ fees.
Perhaps it is possible to negotiate in good faith with the buyer about splitting the costs. But in the end, if the buyer owes the lawyer money for work on a sale that has now been cancelled by you, you will probably be held responsible for settling the bill.
You could ask for more advice from a paralegal advice organisation like the Black Sash:
You can send an email to email@example.com,
Or send a WhatsApp message or Please-Call-Me to their helpline: 072 663 3739 / 063 610 1865.
Wishing you the best,
Answered on June 4, 2021, 2:55 p.m.
Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.