When property sales agreements are arrived at involving individual owners, the Alienation of Land Act makes it mandatory that these are put in writing. However, when a company, close corporation or trust sells the property the deal takes the form of a transfer of members’ interests, or an agreement to change the beneficiary of the trust and, strange through it may seem, these can be verbal contracts.

A significant number of properties (including many residential properties) in South Africa are still held by companies, close corporations and trusts and are sold through verbal contracts, says Tony Clarke, MD of Rawson Properties,

But, he warns, this has led to serious difficulties for those involved. In the absence of written proof, such agreements are likely to be fraught with risk.

“Differing interpretations all too often lead to complicated and expensive litigation processes. It is therefore essential, whatever form your agreement takes, that the deal is recorded in writing and that, as is legally required when individually owned property is sold, the property and the parties are clearly identified and the prices agreed to. Any special conditions such as delays on transfer, must be recorded. It is also absolutely essential that the agreement be signed by all parties, with witnesses,” says Clarke.